FIT 1.2 Introduction

7Under section 60A(1) of the Act, before a firm16 may make an application for the FCA's approval of a controlled function14 the firm14 must be satisfied that the person for whom the application is made is a fit and proper person to perform that function.

Under section 61(1) of the Act (Determination of applications), the FCA 7 may grant an application for approval made under section 60 (Applications for approval) of the Act14 only if it is satisfied that the candidate is fit and proper to perform the controlled function to which the application relates.

Under section 63F of the Act, a firm16 may issue a certificate to a person to perform a certification function14 only if it is satisfied that the person is a fit and proper person to perform that function.7

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 certification function14, 7a firm16 must have particular regard to whether that person:

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.

7The key general rules relating to the criteria listed in FIT 1.2.1BG1410 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 personnel14 of firms generally,10 the competent employees rule10; 14

3. (3)

   in relation to retail activities, TC 2.1.1R, TC 2.1.5BR and14 TC 2.1.12R (employees' competence); and14

4. (4)

   for those who are employees of insurance firms, SYSC 3.1.6R.14

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.

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

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).

1815For as long as the standstill direction referred to in SYSC 27.6.1G, SUP 10A.1.7R and SUP 10C.1.4R is in force, the guidance in FIT 1.2.4AG and FIT 1.2.4AG in the version of the FCA Handbook that was in force immediately before IP completion day17 is still relevant.