FIT 1.2 Introduction

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

The method of applying for approved person status is set out in SUP 10.

Under section 63(1) of the Act (Withdrawal of approval), the FSA may withdraw its approval if it considers that the person in respect of whom the approval was given is not fit and proper to perform the controlled function to which the approval relates.

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

approved person is competent to carry out a controlled function.

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's Home 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 FSA 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 laundering responsibilities (see CF11), 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 FSA will have regard to a candidate's competence and capability as well as his honesty, integrity, reputation and financial soundness.3