ENF 7.5 The FSA's policy on withdrawal of approval

The FSA may withdraw its approval only if it considers that the person in respect of whom it was given is not a fit and proper person to perform the function to which the approval relates. Where a person ceases to perform controlled functions for a firm for reasons unconnected with his fitness and propriety, the firm must notify the FSA through the procedure set out in SUP 10 (Approved persons). ENF 7.5.2 G to ENF 7.5.5 G set out how the FSA will approach the question of whether a person is a fit and proper person to perform the function to which his approval relates.

The FSA recognises that its decisions to withdraw approval will often have a substantial impact on those concerned. When it considers whether to withdraw approval from a person it will take account of all relevant factors, including, but not limited to, the matters set out below:

1. (1)

   the matters set out in section 61(2) of the Act (Determination of applications) (see ENF 7.3.4 G);

2. (2)

   the criteria for assessing the fitness and propriety of approved persons. These are contained in FIT 2.1 (Honesty, integrity and reputation); FIT 2.2 (Competence and capability) and FIT 2.3 (Financial soundness). The criteria include:

   1. (a)

      honesty, integrity and reputation; this includes an individual's openness and honesty in dealing with consumers, market participants and regulators, and ability and willingness to comply with the requirements placed on him by or under the Act as well as with other legal and professional obligations and ethical standards (see ENF 7.5.2 G (3));

   2. (b)

      competence and capability; this includes having the necessary skills to carry out the controlled function that he is performing; and

   3. (c)

      financial soundness; this includes whether the individual has been the subject of any judgement debts or awards in the United Kingdom or elsewhere that are continuing or were not satisfied within a reasonable period;

3. (3)

   whether, and to what extent, the approved person has:

   1. (a)

      failed to comply with the Statements of Principle; or

   2. (b)

      been knowingly concerned in a contravention by a relevant firm of a requirement imposed on the firm by or under the Act (including the Principles and other rules);

4. (4)

   the relevance, materiality and length of time since the occurrence of any matters indicating unfitness;

5. (5)

   the severity of risk which the person poses to consumers and confidence in the financial system; and

6. (6)

   the previous disciplinary record and general compliance history of the person including whether the FSA (or any previous regulator) has previously imposed a disciplinary sanction on the person.

The FSA may have regard to the cumulative effect of a number of factors which, when considered on their own, may not be sufficient to show that the person is not fit and proper to continue to carry out a controlled function.

The FSA may also take account of the particular controlled function which an approved person is carrying out within a firm, the nature and activities of the firm concerned and the markets within which it operates.

It is impossible to produce a definitive list of matters which the FSA might take into account when considering whether an approved person is not a fit and proper person to continue to carry out a particular controlled function in a particular firm. This is because of the diverse nature of the activities and controlled functions which the FSA regulates. Accordingly, certain matters that do not fall squarely, or at all, within the matters referred to above may also be considered, for example, if a person has been convicted of, or dismissed or suspended from employment for abuse of drugs or other substances, or has convictions for serious assault. In these circumstances, the FSA will consider whether the conduct or matter in question is relevant to the person's fitness and propriety for the particular controlled function.