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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 IV 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 G and SUP 10.1.13 R ), or apply for a top-up permission (see SUP 10.1.14 R);

  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 FSA will consider when assessing the fitness and propriety of a candidate for a controlled function (see generally SUP 10 on approved persons). The criteria are also relevant in assessing the continuing fitness and propriety of approved persons. The criteria that the FSA will consider in relation to an authorised person are described in COND.

FIT 1.2 Introduction

FIT 1.2.1 G RP

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.

FIT 1.2.2 G

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

1
FIT 1.2.3 G

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.

FIT 1.2.4 G RP

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.

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 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 laundering4 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

4

FIT 1.3 Assessing fitness and propriety

FIT 1.3.1 G RP

The FSA 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 FSA 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 FSA 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 FSA's attention which suggests that the person might not be fit and proper, the FSA will take into account how relevant and how important it is.

FIT 1.3.5 G RP

During the application process, the FSA 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.