Fit and Proper Requirements

Also known as: Fit and Proper, fit & proper, F&P requirements

The minimum standards of honesty, competence and financial soundness that FSPs, key individuals and representatives must meet.

The Fit and Proper requirements are the minimum standards a person must satisfy to be licensed or appointed in the financial services industry. They are set out in the Determination of Fit and Proper Requirements under the FAIS Act.

The requirements cover several areas: honesty, integrity and good standing; competence (including minimum qualifications, the regulatory examinations such as the RE5, and relevant experience); operational ability; and financial soundness.

A person who no longer meets these standards can be debarred from rendering financial services. Continuous Professional Development (CPD) is part of maintaining the competence component over time.

Related terms

RepresentativeA person who renders a financial service to clients on behalf of an FSP — the role the RE5 exam qualifies you for.Key IndividualA person responsible for managing or overseeing the financial services activities of an FSP.DebarmentThe process by which a representative or key individual is barred from rendering financial services for failing to meet legal or Fit and Proper standards.Continuous Professional Development (CPD)Ongoing learning that representatives and key individuals must complete each year to stay competent and Fit and Proper.

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