Content Options

Content Options

View Options

FIT 1.1 Application and purpose

FIT 1.1.1 G RP

FIT applies to:

  1. (1)

    a firm;

  2. (2)

    an applicant for Part 4A permission;

  3. (3)

    and EEA firm, a Treaty firm or a UCITS qualifier that wishes to establish a branch into the United Kingdom using EEA rights, Treaty rights or UCITS directive rights (see SUP 10.1.12 G9SUP 10A.1.10 G and SUP 10B.1.10 G9 and SUP 10.1.13 R9SUP 10A.1.11 R and SUP 10B.1.11 R9), or apply for a top-up permission (see SUP 10.1.14 R9SUP 10A.1.13 RSUP 10B.1.12 R9);

  4. (4)

    an approved person; and

  5. (5)

    a candidate.

FIT 1.1.2 G RP

The purpose of FIT is to set out and describe the criteria that the FSA8appropriate regulator8 will consider when assessing the fitness and propriety of a candidate for a controlled function (see generally SUP 109SUP 10A and SUP 10B9 on approved persons). The criteria are also relevant in assessing the continuing fitness and propriety of approved persons.


FIT 1.2 Introduction

FIT 1.2.1 G RP

Under section 61(1) of the Act (Determination of applications), the appropriate regulator 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.

FIT 1.2.2 G


FIT 1.2.3 G


FIT 1.2.3A G RP

19Under 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 RP

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

approved person is competent to carry out a controlled function.

FIT 1.2.4A G RP

2Under Article 5(1)(d) of the MiFID Implementing Directive and Article 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 a person to perform a controlled function 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

FIT 1.2.4B G RP

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).

FIT 1.3 Assessing fitness and propriety

FIT 1.3.1 G RP

The appropriate regulator will have regard to a number of factors when assessing the fitness and propriety of a person to perform a particular controlled function. The most important considerations will be the person's:

  1. (1)

    honesty, integrity and reputation;

  2. (2)

    competence and capability; and

  3. (3)

    financial soundness.

FIT 1.3.2 G RP

In assessing fitness and propriety, the appropriate regulator will also take account of the activities of the firm for which the controlled function is or is to be performed, the permission held by that firm and the markets within which it operates.

FIT 1.3.3 G RP

The criteria listed in FIT 2.1 to FIT 2.3 are guidance and will be applied in general terms when the appropriate regulator is determining a person's fitness and propriety. It would be impossible to produce a definitive list of all the matters which would be relevant to a particular determination.

FIT 1.3.4 G RP

If a matter comes to the appropriate regulator's attention which suggests that the person might not be fit and proper, the appropriate regulator will take into account how relevant and how important it is.

FIT 1.3.5 G RP

During the application process, the appropriate regulator may discuss the assessment of the candidate's fitness and propriety informally with the firm making the application and may retain any notes of those discussions.