FCA Handbook - FIT 1 General

You are viewing FIT 1 General as it appeared on 01/09/2026. The current version of FIT 1 General was last updated on 24/04/2026.

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FIT 1.1 Application and purpose

FIT applies to:

(1)
an SMCR firm;
(2)
an applicant for Part 4A permission that will be an SMCR firm if the application succeeds;
(3)
[deleted]
(4)
an approved person performing an FCA controlled function;
(5)
a candidate for an FCA controlled function;
(6)
a certification employee performing an FCA certification function;
(7)
a person whom an SMCR firm is proposing to certify to perform an FCA certification function; and
(8)
a board director as set out in FIT 1.1.2G(1)(e).

The purpose of FIT is to set out and describe the criteria that:

(1)
an SMCR firm should consider when:
1. (a)
  assessing the fitness and propriety of a candidate whom the firm is proposing to put forward for approval as an FCA-approved SMF manager;
2. (b)
  assessing the continuing fitness and propriety of a person approved to perform the function of an FCA-approved SMF manager, including for formulating an opinion about whether there are any grounds on which the regulator could withdraw the approval given to that individual to perform that function under section 63(2A) of the Act;
3. (c)
  assessing the fitness and propriety of a person whom the firm is proposing to certify to perform an FCA certification function;
4. (d)
  assessing the continuing fitness and propriety of a person whom the firm has certified to perform an FCA certification function; and
5. (e)
  (in the case an FCA-authorised person that is not a limited scope SMCR firm) assessing the fitness of a non-SMF board director under the competent employees rule, any onshored regulation, SYSC 23.4.1AR (Checks for certain directors) or any other requirement of the regulatory system.
(2)
the FCA will consider when assessing the fitness and propriety of a candidate for a controlled function, including a designated senior management function (see generally SUP 10A and SUP 10C on approved persons), and may consider when assessing the continuing fitness and propriety of approved persons.

FIT 1.2 Introduction

Under section 60A(1) of the Act, before a firm may make 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 to perform that function.

Under section 61(1) of the Act (Determination of applications), the FCA may grant an application for approval made under section 60 (Applications for approval) of the Act 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 firm may issue a certificate to a person to perform a certification function only if it is satisfied that the person is a fit and proper person to perform that function.

Under sections 60A and 63F of 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 function, a firm must have particular regard to whether that person:

(1)
has obtained a qualification; or
(2)
has undergone, or is undergoing, training; or
(3)
possesses a level of competence; or
(4)
has the personal characteristics;

required by general rules made by the FCA.

The key general rules relating to the criteria listed in FIT 1.2.1BG include:

(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)
for personnel of firms generally, the competent employees rule;
(3)
in relation to retail activities, TC 2.1.1R, TC 2.1.5BR andTC 2.1.12R (employees' competence); and
(4)
for those who are employees of insurance firms, SYSC 3.1.6R.

Under 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 should take into account when determining fitness and propriety. However, section 61(2) states that the FCA may have regard (among other things) to whether the candidate or approved person:

(1)
has obtained a qualification; or
(2)
has undergone, or is undergoing, training; or
(3)
possesses a level of competence; or
(4)
has the personal characteristics;

required by general rules made by the FCA.

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).

FIT 1.3 Assessing fitness and propriety

General matters

The FCA will have regard to a number of factors when assessing the fitness and propriety of a person to perform a particular controlled function, as more particularly described in FIT 2 (Main assessment criteria).

The FCA would expect firms that are required to assess the fitness and propriety of staff being assessed under FIT to have regard to substantially the same factors as those outlined in FIT 2.

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

(1)
honesty, integrity and reputation;
(2)
competence and capability; and
(3)
financial soundness.

In assessing fitness and propriety, the FCA 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.

A firm assessing the fitness and propriety of staff being assessed under FIT should consider:

(1)
the nature, scale and complexity of its business, the nature and range of financial services and activities undertaken in the course of that business; and
(2)
whether the candidate or person has the knowledge, skills and experience to perform the specific role that the candidate or person is intended to perform.

A firm is reminded that, in assessing a candidate for a position within the management body of the firm, SYSC 4.3A.3R(3) requires the firm to ensure that the management body, as a collective, possesses adequate knowledge, skills and experience to understand the firm's activities.

(1) An assessment of fitness and propriety should take into account all the factors of the particular case. It would be impossible to produce a definitive list of all the matters that would be relevant to a particular determination. The criteria in this section and in FIT 2.1 to FIT 2.3 are not intended to be a definitive list of matters to be considered.
(2) The criteria listed in this section and in FIT 2.1 to FIT 2.3 are guidance and will be applied in general terms when the FCA is determining a person's fitness and propriety.
(3) A firm assessing the fitness and propriety of staff being assessed under FIT should be guided by substantially the same criteria as the ones in this section and in FIT 2.1 to FIT 2.3 (to the extent applicable to the firm).
(4) A firm should carry out any assessment of fitness and propriety fairly and in accordance with privacy, employment and other relevant law.

If a matter comes to the FCA's attention which suggests that the person might not be fit and proper, the FCA will take into account how relevant and how important it is. In the same way, if a matter comes to the attention of a firm which suggests that any staff being assessed under FIT might not be fit and proper, the firm should take into account how relevant and how important that matter is.

A firm assessing the continuing fitness and propriety of an approved person is required to notify the FCA under section 63(2A) of the Act if it forms the opinion that there are grounds on which the FCA could withdraw its approval (see SUP 10C.14.24R). In discharging its obligation to notify the FCA, a firm should take into account how relevant and how important the matter is that comes to its attention which suggests an approved person might not be fit and proper before determining that a notification should be made.

In relation to a firm assessing continuing fitness and propriety of an approved person under section 63(2A) of the Act during a temporary absence, see the guidance at SUP 10C.14.5GG.

A firm assessing the continuing fitness and propriety of staff being assessed under FIT should assess the role that the individual is actually performing at the time the assessment is done. For this purpose, the assessor(s) should be provided with an up-to-date job description for that individual in advance of the assessment.

During the application process for a controlled function, the FCA 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.

Breaches of requirements of the regulatory system

(1) Breaches (or the risk of future breaches) of the requirements of the regulatory system are obviously relevant to fitness and propriety under the regulatory system and thus to FIT because they are part of the regime under which fitness and propriety under FIT is assessed.
(2) Such breaches will often take place in an individual’s work life but, as explained in FIT 1.3.11G, such conduct may also occur outside work.

(1) Breaches of the regulatory system include:
1. (a) breach of COCON or APER;
2. (b) (where a firm is required to try to ensure that someone in the position of the member of the staff being assessed under FIT meets a particular standard) failure to meet that standard; and
3. (c) involvement in a breach by the firm of the requirements of the regulatory system.
(2) A requirement in (1)(b) might be one relating to the particular position the member of the staff being assessed under FIT holds. It may also be one covering a firm's workforce generally or a certain section of it to which the member of the staff being assessed under FIT belongs, such as the competent employees rule.

A breach of COCON or of other requirements of the regulatory system can be relevant to fitness and propriety under FIT 2.1 (Honesty, integrity and reputation) or FIT 2.2 (Competence and capability).

(1) One of the purposes of the fitness and propriety requirement is to ensure that firms themselves meet the requirements of the regulatory system. Ensuring that its staff are fit and proper will help to ensure that the firm itself meets the threshold conditions and will comply with the standards of the regulatory system.
(2) Thus, conduct by a member of a firm's staff being assessed under FIT may show that member to be unfit if:
1. (a) it results in the firm not meeting the standards in (1); or
2. (b) it is a factor that points towards the firm not meeting those standards, even if the position of the member of the firm's staff being assessed under FIT in the firm is not sufficiently significant for their misconduct to mean that the firm does not meet those standards.

A breach of the requirements of the regulatory system does not automatically mean that a member of the staff being assessed under FIT is not fit and proper. An assessment should be made on a case-by-case basis. In the case of COCON, relevant factors include:
(1) the seriousness of the breach, taking into account matters such as the following (some of the other sub-paragraphs of this paragraph also contain factors relevant to seriousness):
1. (a) whether the breach involved dishonesty, breach of trust or violence;
2. (b) whether the individual knew that their conduct was a breach of COCON or their firm's internal requirements but carried on the conduct anyway;
3. (c) the vulnerability of those affected by the breach;
4. (d) whether the breach was of Individual Conduct Rule 1 (You must act with integrity: see COCON 2.1.1R), although not every breach of that rule means that the individual is unfit;
5. (e) the harm done; and
6. (f) the factors in column (2) of row (A) of the table in SYSC 22.5.11G (Table: Examples of factors to take into account when deciding whether old misconduct is sufficiently serious to disclose);
(2) how recent the breach was (the fact that the breach happened a long time ago may lessen the weight of that breach);
(3) steps (including training) taken by the member of staff being assessed under FIT since the breach to address the behaviours involved in the breach or otherwise to address the causes of the misconduct;
(4) (in the case of a breach caused by lack of competence) whether that lack has been remedied by subsequent training or experience;
(5) other evidence of rehabilitation;
(6) remorse and insight into the seriousness of the breach;
(7) absence of the mitigating factors in (3) to (6);
(8) the individual’s past disciplinary and performance record;
(9) the individual’s record of breaching COCON or other requirements of the regulatory system;
(10) the individual’s health, disability and life events which may have been a factor in the breach;
(11) whether the breach was repeated or part of a pattern;
(12) the seniority of the individual (the fact that the individual held a senior position may make the breach more serious than it would be if they held a junior position);
(13) the likelihood of recurrence of the relevant conduct – for instance, whether the conduct was a one-off lapse; and
(14) the relevance of the breach to the role for which the member of staff being assessed under FIT is being assessed.

Breaches of the requirements of the regulatory system are relevant to fitness and propriety even if they take place outside work. Thus, for example, it would be relevant to an individual’s fitness if they carried on a regulated activity outside work without being authorised as required.

(1) The FCA's statutory objectives are a key factor in deciding whether something is relevant to whether a person is fit and proper. Conduct that is inconsistent with the FCA's statutory objectives is likely to show that the person concerned is not fit and proper.
(2) Maintaining public confidence in the financial system and financial services industry in the United Kingdom is part of the FCA's statutory objectives. Therefore, conduct of a type that is likely to damage such public confidence is likely to mean that the person concerned is not fit and proper.
(3) However, the FCA accepts that it would be reasonable for a firm not to apply the factors in FIT 1.3.12G as a self-standing criterion when assessing fitness and that the FCA is in a better position to make judgements of this kind than a firm.

(1) Misconduct may mean that a person is not fit and proper even if that misconduct does not have such great effects that it measurably prejudices the FCA's statutory objectives by itself.
(2) For example, fraud is inconsistent with the FCA's statutory objectives and is likely to mean that the person committing it is not fit and proper even if it is small-scale.

Conduct connected to work

(1) Breaches of the law or of requirements not forming part of the regulatory system committed during the course of work carried out by a member of the staff being assessed under FIT for their firm or a previous employer may mean that the person concerned is not fit and proper.
(2) Such requirements may include requirements of other regulatory authorities (including a previous regulator), clearing houses and exchanges, professional bodies, or government bodies or agencies.

Relevance of behaviour in private or personal life

(1) COCON is limited to conduct related to a firm's activities (see COCON 1.1.6R to COCON 1.1.7R) and sometimes only to a part of its activities (for example, see COCON 1.1.7AR). An assessment of fitness and propriety should not be limited in that way.
(2) That means that conduct is potentially relevant to an assessment of fitness and propriety even though COCON 1.3 (Scope of COCON) says that it is generally outside the scope of COCON because:
1. (a) it relates to the person's private or personal life; or
2. (b) it does not have a sufficient connection with SMCR financial activities or other activities of the firm in question.
(3) For example, conduct described in the table in COCON 1.3.7G (Table: Private or personal life and COCON) as generally being outside the scope of COCON may be relevant to fitness and propriety.

(1) Conduct that:
1. (a) takes place in the private or personal life or other activities outside the regulatory system of a member of staff being assessed under FIT; and
2. (b) shows that there is a material risk that the person will breach the standards and requirements of the regulatory system),
may show that the member of the staff being assessed under FIT is not fit and proper.
(2) Conduct that:
1. (a) takes place in the private or personal life or other activities outside the regulatory system of a member of the staff being assessed under FIT; and
2. (b) if repeated in the role for which they are being assessed, would breach the standards and requirements of the regulatory system,
may show that they are not fit and proper if there is a material risk it will be repeated in that role.
(3) Two examples are dishonesty and lack of integrity. Honesty and integrity are both key qualities that staff being assessed under FIT should have. Thus, conduct outside the regulatory system that is dishonest or shows a lack of integrity is always relevant to fitness and propriety under FIT.
(4) Similarly, violence or sexual misconduct by a member of the staff being assessed under FIT in their private or personal life or in work outside the regulatory system may show that there is a risk of similar misconduct in relation to:
1. (a) customers or counterparties of their firm; or
2. (b) people working for their firm, which, as explained in COCON 4.3 (Specific guidance on harassment), may be a breach of the rules in COCON.
(5) Likewise, a breach of standards or requirements that are similar to ones applying under the regulatory system is relevant to fitness and propriety under FIT.
(6) Conduct in an individual’s personal or private life may be relevant if it demonstrates a willingness to disregard ethical or legal obligations or to do the things in FIT 1.3.17G(1)(a)(ii) or FIT 1.3.17G(1)(a)(iii).
(7) However:
1. (a) it should not be assumed that simply because a member of the staff being assessed under FIT engages in conduct in their private life, there is a material risk that they will repeat such conduct in their regulated role; and
2. (b) a remote or speculative risk that the member of the staff being assessed under FIT will breach the standards and requirements of the regulatory system is not sufficient for these purposes and instead it is a material risk that should be taken into account.
(8) Even if a breach of a law or standards and requirements by a member of the staff being assessed under FIT would not otherwise be relevant to their fitness and propriety, repeated breaches may raise doubts as to whether they will follow the requirements of the regulatory system (see (6)).

(1) Misconduct in a person’s private or personal life or in their working life outside the regulatory system may be relevant to their fitness and propriety even if there is little or no risk of it being repeated in their work for their firm. Conduct in an individual’s personal or private life may be relevant if:
1. (a) it demonstrates a willingness to:
  1. (i) disregard ethical or legal obligations;
  2. (ii) abuse a position of trust;
  3. (iii) exploit the vulnerabilities of others; and/or
2. (b) it is sufficiently serious such that, were the person permitted to work at a firm, it could undermine public confidence in the regulatory system (or any part thereof) or otherwise impact the FCA's statutory objectives.
(2) A custodial sentence imposed by the court (even if suspended) is likely to mean that the matter is sufficiently serious, but this is subject to consideration of other relevant matters including how old the offence is and rehabilitation since the date of the offence.
(3) The reason for (1) and (2) is that the person’s working in the role for which they are being assessed may damage public confidence in the financial system and financial services industry in the United Kingdom and consequently be inconsistent with the FCA's statutory objectives.
(4) One reason for the effect in (3) is that if the regulatory system allows persons to carry on working in those circumstances it would reflect negatively on the rigour and quality of the standards expected of those working in such positions and in turn on the quality of those who work in such positions. The regulatory standards that apply to a person working for one firm are likely to reflect on the regulatory standards applying generally.

(1) In the FCA's view, misconduct of the type in FIT 1.3.17G can mean that the person concerned is not fit and proper even if it cannot be shown that the misconduct will by itself cause direct and discernible damage to public confidence in the financial system and financial services industry in the United Kingdom or to confidence in their firm on the part of customers or those who deal with the firm.
(2) As with other kinds of misconduct (see FIT 1.3.13G), it is sufficient if the misconduct is of a type that is inconsistent with the FCA's statutory objectives.
(3) In addition, the fact that a person only works for a small firm and that their misconduct does not significantly damage the confidence of the firm's clients or those who deal with the firm or itself damage confidence in the financial services industry more generally does not prevent the reflection on the standards of the regulatory system described in FIT 1.3.17G(4).

The factors in FIT 1.3.17G(1)(a) may in some cases be relevant to fitness and propriety because they show that there is a material risk that the member of the staff being assessed under FIT will repeat that conduct in a work context or otherwise breach the standards and requirements of the regulatory system.

Relevance of behaviour in private or personal life: No duty to monitor

(1) Generally, a firm need not monitor the private lives of its staff who are subject to the standards in FIT to see whether there is something that is relevant to fitness under FIT. A firm need only look into the private life of a member of the staff being assessed under FIT if there is a good reason to – for instance, if the firm becomes aware of an allegation which, if true, would call into question their fitness under FIT, including having regard to FIT 1.3.17G(1).
(2) This means, for example, that the FCA would not expect a firm to investigate allegations relating to a member of the staff being assessed under FIT's private life if:
1. (a) those allegations are trivial and therefore would not impact the member of the staff being assessed under FIT's fitness and propriety under FIT;
2. (b) those allegations, even if true, would not otherwise show a material risk that the person will breach the requirements and standards of the regulatory system (subject to FIT 1.3.17G); or
3. (c) the firm reasonably considers the allegation to be implausible.
4. (3) Even if a firm is aware of an allegation against a member of the staff being assessed under FIT relating to their private life, the firm may have a limited ability to investigate. In any case, it is likely that it will be more appropriate for the relevant law enforcement or other authorities to investigate. These points may mean that it will not be appropriate for the firm to investigate (subject to (5)).
(4) Therefore, the FCA accepts that it is likely that a firm will often rely on:
1. (a) matters of the kind described in FIT 2.1.3G (Honesty, integrity and reputation) or FIT 2.2.1G(4) (Competence and capability);
2. (b) criminal convictions; or
3. (c) the findings of a court, tribunal, regulator, arbitrator, public enquiry or other body whose responsibility it is to make findings of the relevant kind,
in deciding whether or not a member of the staff being assessed under FIT has carried out wrongdoing in their private life of a kind that is relevant to fitness and propriety.
(5) Nevertheless, a firm should consider what steps it can reasonably take to investigate and assess the possible impact on the fitness and propriety of a member of the staff being assessed under FIT of a matter in (1). For example, the firm should, where appropriate, ask for an explanation from the member of the staff being assessed under FIT concerned.
(6) The FCA will not necessarily limit its assessments of fitness and propriety in the way described in (4).
(7) Firms are reminded of their obligations under SUP 10C.14.18R (Notifications about fitness, disciplinary action and breaches of COCON).
(8) In accordance with FIT 1.3.3G(4) (General matters), a firm should carry out any investigation that it does undertake fairly and in accordance with privacy, employment and other relevant law.

Relevance of behaviour in private or personal life: Social media

(1) FIT 1.3.21G deals with the use of social media (including a messaging app) by a member of the staff being assessed under FIT in their private or personal life.
(2) The factors in this section and the rest of FIT apply to establishing when social media activity is relevant to fitness and propriety under FIT in the same way as they do to establishing the relevance of other kinds of conduct.
(3) Thus, for example, if a person’s social media activity in their private life indicates a material risk that the person will breach the requirements and standards of the regulatory system, FIT 1.3.16G explains that such activity will be relevant to their fitness and propriety. Examples could include threats of violence or clear involvement in criminal activities or conduct that shows a material risk of misconduct that would breach COCON of the kind in COCON 4.3 (Specific guidance on harassment).
(4) If, on the other hand, a person’s social media activity in their private life does not indicate a material risk that the person will breach the requirements and standards of the regulatory system, FIT 1.3.16G means that (subject to FIT 1.3.17G) the social media activity is unlikely to be relevant to their fitness and propriety and so nothing in FIT requires a firm to concern itself with it.
(5) Subject to the other points in FIT 1.3.21G and the rest of FIT 1.3, a person can lawfully express their views on social media even if they are controversial, without calling into question their fitness under FIT, and even if colleagues at work disagree with or are upset by those views.
(6) FIT 1.3.20G means that a firm generally need not monitor the social media activity in their private lives of its staff who are subject to the standards in FIT.

Offences

When taking into account offences, the FCA will give (and a firm should give) particular consideration to offences of dishonesty, fraud, financial crime or an offence under legislation relating to companies, building societies, industrial and provident societies, credit unions, friendly societies, banking, other financial services, insolvency, consumer credit companies, insurance, consumer protection, money laundering, market manipulation and insider dealing, offences of violence, sexual offences and offences related to a person's or a group's demographic characteristics such as racially motivated or aggravated offences, whether or not committed in the United Kingdom.

The FCA will (and a firm should) take account of the effect of a conviction for a criminal offence on a person’s fitness on a case-by-case basis, taking into account the seriousness of, and circumstances surrounding, the offence, the explanation offered by the convicted person, the relevance of the offence to the role, the passage of time since the offence was committed and evidence of the individual’s rehabilitation.

Offences in FIT 1.3.22G are not just relevant if committed in a work context. As described in this section (particularly FIT 1.3.16G to FIT 1.3.18G), conduct in the private or personal life or in the working life outside the regulatory system of a member of the staff being assessed under FIT may be relevant to their fitness and propriety.

Point In Time

01/09/2026

24/04/2026

02/06/2021

01/01/2021

07/12/2020

09/12/2019

10/12/2018

01/10/2018

29/06/2018

03/01/2018

07/03/2017

07/03/2016

01/01/2016

02/04/2013

01/04/2013

06/10/2010

06/05/2009

01/11/2007

06/10/2007

01/01/2005