Fitness and Propriety ('F&P') Assessment Guidance
Who needs to be assessed?
All individuals that are to be appointed as key persons, i.e. in any of the Controlled Functions for a regulated entity must be notified to the Isle of Man Financial Services Authority (“the Authority”) as detailed within the Regulatory Guidance – Fitness and Propriety. The equivalent requirement applies to individuals proposed for a key role with a licence applicant.
Assessable roles for licence applicants and regulated entities include controllers, directors, the chief executive, principal control officers and managers. The assessment considers the integrity, competence and financial standing of the individual.
Which forms need to be submitted?
For regulated entities (and applicants), the appropriate form will depend on the nature of the Controlled Function. Appendix 2 to the Regulatory Guidance – Fitness and Propriety sets out the types of Controlled Functions, and Appendix 6 details which forms should be used in each case.
The F&P Assessment Forms are available here.
Please be aware, if individuals have any spent convictions, these do need to be disclosed to the Authority by the individual, but not within the F&P Forms. Instead they should be disclosed to the Authorisations Division, under separate cover, directly by the individual. Receipt of these notifications will always be acknowledged, to the individual, by the Authorisations Division.
The completed forms should be submitted through the regulated entity or applicant and should be directed to the Authorisations Division at the Authority.
Criminal records checks
Before an F&P form is submitted to the Authority in respect of a notified and accepted Controlled Function, a criminal records check should be undertaken. The forms contain a section confirming whether such a check has been undertaken and if so on what date. If no check has been undertaken, the reason for not doing so must be given in the form. Please note: the certificate itself should only be supplied to the Authority where the controlled function is part of a new licence application. The form will be returned to the individual.
In order for a regulated entity or applicant to satisfy itself as to the integrity of an individual, it must review a certificate that evidences that a BASIC level criminal records check has been carried out on that individual. The Authority expects the check to have been carried out within 12 months of the date of the F&P form. If the criminal records check is less recent (or has not been undertaken), the regulated entity or applicant must provide reasons for this, and this rationale will form part of the Authority’s consideration of the individual’s fitness and propriety.
A criminal records check certificate may be obtained by one of the following four methods:
- The individual may request a Basic check themselves though the Disclosure and Barring Service, Disclosure Scotland or AccessNI. The certificate will be provided directly to the individual which should be made available to the regulated entity (or an applicant to become a regulated entity);
- Where a regulated entity, or an applicant to become a regulated entity is registered with the Isle of Man Vetting Bureau (of the Isle of Man Government), they may request that a Basic check is undertaken on an individual. The certificate will be provided to the requesting entity with a copy of the results also provided to the individual;
- If the individual has had a Basic, Standard or Enhanced check undertaken by another party within the last 12 months and the individual happy to share this with the employer; or
- If the individual is or has been resident outside the UK, please see the guidance at: https://www.gov.uk/government/publications/criminal-records-checks-for-overseas-applicants which will provide details of how to obtain a criminal records check from these jurisdictions.
Please note that the results from a Data Subject Access Request (or similar) made to the Isle of Man Constabulary, is not a substitute to undertaking a criminal records check.
The regulated entity or applicant should consider whether the details provided on the certificate issued by the checking body are consistent with the details stated by the individual within the F&P form, and should also consider whether the details on the certificate impact on its ability to confirm to the Authority that it is satisfied that the individual is fit and proper for the role in which they are proposed.
For the avoidance of doubt, if a regulated entity’s existing key staff do not take on any new key staff roles, the Authority does not expect criminal records checks to be routinely renewed.
When should notification be given to the Authority?
The Authority must be notified at least 28 days in advance of an appointment to a Controlled Function that is a notified and accepted Controlled Function. For Controlled Functions that are notified only, the notification can take place up to 10 business days following the appointment. The Authority expects that notification will be made by completing and submitting the relevant form.
Please note, the Authority will generally return any F&P forms that have not been completed correctly or are incomplete. The assessment process will only commence when a properly completed form has been supplied.
Full details of the Fitness and Propriety Assessment Criteria / Forms / and Controlled Functions can be found in the Regulatory Guidance – Fitness and Propriety.