Content Options

FIT 1.2 Introduction

FIT 1.2.-1 G

7Under section 60A(1) of the Act, before a relevant authorised person may make an application for the FCA's approval of a designated senior management function, the relevant authorised person8 must be satisfied that the person for whom the application is made is a fit and proper person to perform that function.

8
FIT 1.2.1 G

Under section 61(1) of the Act (Determination of applications), the FCA7 may grant an application for approval made under section 60 (Applications for approval) only if it is satisfied that the candidate is fit and proper to perform the controlled function to which the application relates.

7
FIT 1.2.1A G

Under section 63F of the Act, a relevant authorised person may issue a certificate to a person to perform a specified significant-harm function only if it is satisfied that the person is a fit and proper person to perform that function.7

7
FIT 1.2.1B G

7Under sections 60A and 63F 7of the Act, in assessing whether a person is a fit and proper person to perform an FCA designated senior management function or an FCA specified significant-harm function, 7a relevant authorised person must have particular regard to whether that person:

7 7
  1. (1)

    has obtained a qualification; or

  2. (2)

    has undergone, or is undergoing, training; or

  3. (3)

    possesses a level of competence; or

  4. (4)

    has the personal characteristics;

required by general rules made by the FCA.

FIT 1.2.1C G

7The key general rules relating to the criteria listed in FIT 1.2.1B include:

  1. (1)

    in the case of very senior employees, SYSC 4.2 (persons who effectively direct the business) and SYSC 4.3A.3R (management body);

  2. (2)

    for employees of firms generally, SYSC 5.1.1R (the competent employees rule); and

  3. (3)

    in relation to retail activities, TC 2.1.12R (employees' competence).

FIT 1.2.2 G

[deleted]10

10
FIT 1.2.3 G

[deleted]10

10
FIT 1.2.3A G

10Under section 63(1) of the Act (Withdrawal of approval), the FCA may withdraw an approval under section 59 given by the FCA or the PRA in relation to the performance by a person of a function if it considers that the person is not a fit and proper person to perform the function.

FIT 1.2.4 G

The Act does not prescribe the matters which the FCA7 should take into account when determining fitness and propriety. However, section 61(2) states that the FCA7 may have regard (among other things) to whether the candidate or approved person:7

7 7
  1. (1)

    has obtained a qualification; or

  2. (2)

    has undergone, or is undergoing, training; or

  3. (3)

    possesses a level of competence; or

  4. (4)

    has the personal characteristics;

required by general rules made by the FCA.

7
FIT 1.2.4A G

2Under Article 5(1)(d) of the MiFID Implementing Directive and articles9 31 and 32 of MiFID, the requirement to employ personnel with the knowledge, skills and expertise necessary for the discharge of the responsibilities allocated to them is reserved to the firm'sHome State. Therefore, in assessing the fitness and propriety of:9

  1. (1)

    a person to perform a controlled function; or9

  2. (2)

    a certification employee;9

solely in relation to the MiFID business of an incoming EEA firm, the appropriate regulator will not have regard to that person's competence and capability. Where the controlled function relates to matters outside the scope of MiFID, for example money laundering4 responsibilities (see CF11) or activities related to a specified benchmark (see CF 40 and CF 50)5, or to business outside the scope of the MiFID business of an incoming EEA firm, for example insurance mediation activities in relation to life policies, the FCA5 will have regard to a candidate's competence and capability as well as his honesty, integrity, reputation and financial soundness.3

4
FIT 1.2.4B G

6 Where the application relates to a function within a Solvency II firm and is for an FCA controlled function which is also a Solvency II Directive ‘key function’ as defined in the PRA Rulebook: Glossary, then the FCA will also have regard to the assessment made by the firm as required in article 273 of the Solvency II Regulation (EU) 2015/35 of 10 October 2014; Rules 2.1 and 2.2 of the PRA Rulebook: Solvency II Firms: Insurance - Fitness and Propriety, and other factors, as set out in EIOPA Guidelines on system of governance dated 28 January 2015 (see Guideline 16).