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Will I pass the Fit and Proper test?

The fit and proper person test is a benchmark the Financial Conduct Authority (‘FCA’) uses to assess whether an individual is suitable to perform a controlled or senior management function (SMF) in an authorised body.

The FCA updated its “Fit and Proper test for Employees and Senior Personnel sourcebook” in March 2022.

The purpose of the sourcebook is to set out the criteria that the Senior Managers and Certification Regime (‘SM&CR’) should consider when assessing the fitness and propriety of anyone a firm is proposing to put forward to carry out an approved FCA function.

Under section 60A (1) of the Financial Services and Markets Act 2000, before a firm makes an application for the FCA's approval of a controlled function, the firm must be satisfied that the person for whom the application is made is a fit and proper person.

The authorised person must have particular regard to whether the candidate, or any person who may perform a function on the candidate's behalf—

(a) has obtained a qualification,

(b )has undergone, or is undergoing, training,

(c) possesses a level of competence, or

(d) has the required personal characteristics

In the FCA's view, the most important considerations will be the person’s

  • honesty, integrity and reputation
  • competence capability and
  • financial soundness.

The FCA’s criteria when assessing the above, include but are not limited to whether the person has :

  1. been convicted of any criminal offence
  2. been subject to any adverse finding or any settlement in civil proceedings
  3. been the subject of or interviewed in the course of any existing or previous investigation or disciplinary proceedings
  4. been or is to be the subject of any proceedings of a disciplinary or criminal nature
  5. has contravened any of the requirements and standards of the regulatory system or the equivalent standards or requirements of other regulatory authorities
  6. been subject of any justified complaint relating to regulated activities

As a regulator, the FCA has a continuing obligation to ensure individuals who perform a controlled or senior management function, pass the Fit and Proper test.

If you are being investigated by the FCA or need advice on whether you are legally required to disclose a caution or conviction to your employer, or are concerned you will not pass the fit and proper test, contact our regulatory team:

James Saunders                     james@saunders.co.uk

Steve Garratt                          steve.garratt@saunders.co.uk

Amber Richardson                 amber.richardson@saunders.co.uk

Tom Airey                               tom.airey@saunders.co.uk

 

 

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