The Fit and Proper Test FCA

Logo - FCAThe Fit and Proper Test FCA is not an exam you have to pass: it’s a benchmark used to assess whether you are suitable to perform a controlled function.

Those standards also apply when FCA Approved Persons get re-assessed.

When considering a Candidate for a The Fit and Proper Test FCA looks at:

  • honesty (including openness with self-disclosures, integrity and reputation)
  • competence and capability
  • financial soundness

You can check what FCA understands by each of the above-mentioned qualities in the Handbook.

From a Candidate for The Fit and Proper Test FCA expects

Individuals applying to become FCA Approved Persons must understand the importance of establishing an honest relationship with FCA: the application form’s fitness and propriety section asks questions of fact requiring a ‘yes’ or ‘no’ answer about particular actions (not whether the candidate felt the action was justified), some other questions include the word ‘ever’, meaning that the required answers are not restricted to a specified period.

Firms must not make an assessment on whether to disclose a matter and should disclose all information in the supplementary information section of the application (ie Form A). If a firm thinks that a disclosure may not affect the individual’s Fit and Proper Test FCA, they should explain the reason.

Disclosing information for the Fit and Proper Test FCA

When applying, you must disclose everything, even if it may not seem relevant. Being open will count in your favour if there will ever be the need to look at your application more closely because of any adverse information discovered. Have withheld information or provided incomplete facts would affect the success of your application and be a criminal offence.

Seek legal advice if after reading the advice you remain uncertain about disclosing convictions.

The Fit and Proper Test FCAFor assessing a candidate’s Fit and Proper Test FCA considers helpful the following information (the list is not definitive):

  • regulatory references
  • qualification certificates
  • credit checks
  • criminal Records checks
  • directorship checks

References from other authorised firm are known as ‘Regulatory references‘ and they are particularly relevant. Conduct appropriate due diligence on candidates, including acquiring references from the candidate’s previous employer(s), as part of assessing a candidate’s fitness and propriety.

For the Fit and Proper Test FCA generally expects firms to acquire regulatory references to cover the past 5 years (but it depends on the candidate’s regulatory history), including:

  • outstanding liabilities of the candidate from commission payments
  • relevant complaints against the candidate from an eligible complainant
  • information about the:
    • fitness and propriety section (Section 5) of the application for approval (Form A)
    • the main assessment criteria of the fit and proper Test (FIT 2).
    • Difficulties in obtaining the reference

Authorised firms are required to give a reference to the applicant firm as soon as possible if asked under SUP 10A.15.1 of the FCA Supervision Manuals

If the former employer refuses to provide it, inform your FCA case officer (if appointed), or inform them through helpline on 0300 500 0597 or email.