CNB Opinion Clarifies the Interpretation of the Term “Senior Management”

On 25 March 2026, the Czech National Bank published an opinion entitled “On the Definition of the Term ‘Senior Management’ under the AMICIF Act (ZISIF)”, the aim of which is to eliminate ongoing interpretative ambiguities associated with the application of the term “senior management” within the meaning of Act No. 240/2013 Coll., on Investment Companies and Investment Funds (the “ZISIF”). In practice, these ambiguities have manifested themselves particularly in determining the group of persons subject to the obligation to obtain the CNB’s prior consent to perform a function, especially in connection with the term “director of a legal entity” and the definition of persons who “effectively manage the activities of a legal entity”. The opinion aims to unify supervisory practice and strengthen legal certainty for regulated entities.

The basic interpretative starting point of the opinion is the confirmation that, under ZISIF, senior management always includes the statutory body of a legal entity and each of its members. In addition, other persons may also be considered senior management, but only if they факtually manage the activities of the legal entity as a whole. In this respect, the CNB explicitly emphasises that the decisive criterion is not the formal title of the position, but the actual scope of managerial powers and responsibility for the overall management of the company. 

The CNB explicitly states that a “director of a legal entity” within the meaning of ZISIF can only be a person who stands at the top of the executive management of the company and is responsible for its day-to-day operations as a whole. In practice, this description typically corresponds to the chief executive officer (CEO) or managing director, who reports to the statutory body and coordinates the activities of the entire organisation. Merely managing a specific area or department, even if significant, is not sufficient in itself to meet the definition of senior management. 

At the same time, the opinion explicitly excludes from the category of senior management those managerial positions whose scope is limited to specific segments of the company’s activities, such as sales, compliance, administration or accounting. These individuals are not considered senior management regardless of the internal designation of their function or their position within the organisational structure. In this way, the CNB clearly rejects an expansive interpretation that would bring a broader group of managerial employees within the scope of ZISIF, which is intended exclusively for top-level management. 

A significant contribution of the opinion lies in its practical impact on the HR and compliance arrangements of investment companies and investment funds. Regulated entities now have clear guidance for identifying individuals who are subject to the obligation to obtain prior approval from the CNB to perform their function. 

This text was translated by AI.