Fitness and Propriety (F&P)

Senior Management Functions (SMFs) and Certification Staff need to be fit and proper for their roles. See how our Fitness and Propriety (F&P) requirements apply to your firm.

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Detailed explanation of the F&P requirements is contained in the Fit and Proper test for Employees and Senior Personnel (FIT) part of FCA Handbook. The main elements to be considered when assessing F&P are:

  • Honesty, integrity, and reputation
  • Competence and capability
  • Financial soundness

Firms should demonstrate that they are making regular, thorough and consistent assessments of the F&P of SMFs and Certification Staff. In addition to the information in FIT, the following examples set out our expectations of firms when they assess F&P.

Fitness and propriety


Positive indicators

Negative indicators

F&P checks identify new issues with staff – some fail.

F&P checks identify nothing new; a ‘rubber stamp’ exercise.

Relevant SMFs actively oversee the F&P process and ensure appropriate reporting.

Relevant SMFs have delegated the F&P process and cannot demonstrate adequate oversight and reporting.

Competence assessment demonstrates that thought has been given to each specific role (including managers).

Competence assessment is perfunctory and/or cannot be evidenced as being objective.

Development plans are put in place as a result of F&P assessments.

No development needs are identified.

Managers are adequately trained in the firm’s approach to F&P and understand what is expected of them.

Managers are poorly trained and/or have inadequate guidance as to what is expected of them in terms of F&P.

A detailed F&P process has been introduced and integrated into existing HR/performance management processes (it covers what happens if someone fails F&P).

F&P is considered (without review) to already be covered by pre-existing HR/performance management processes and/or there is no process for dealing with someone who fails F&P.

F&P panels – which include senior managers - are convened to consider marginal cases.

Process for considering marginal F&P cases either does not exist or is rarely convened.

Firm has appropriate criteria and a robust process for identifying certification staff on an ongoing basis.

Identification of certification population is ad hoc and/or a burdensome manual process.

Regulatory references disclose misconduct/relevant concerns and are produced in a timely manner.

Regulatory references fail to provide the necessary information and/or are not available promptly.

Small firms may need to interpret some of these indicators in a proportionate way, but they should still give thought to the intention of the indicators, and this should not reduce the effectiveness of their F&P assessments or the Certification Regime. For more information, read section 9 of the SM&CR Guide for solo-regulated firms (PDF).

F&P assessments are only required for individuals who meet the criteria for one or more of the Certification Functions or who are SMFs. However, if firms want to extend similar F&P assessments to individuals who are outside the Certification Regime on a voluntary basis, they can do so.