What is “fit and proper” in the context of FCA regulations?

In the context of FCA regulations, the term "fit and proper" refers specifically to a standard used to assess an individual's suitability for working in the financial services industry. The assessment considers various factors, such as a person’s honesty, integrity, competence, and the ability to perform their role effectively without posing risks to the integrity of the financial system.

This framework is crucial because it helps ensure that individuals in key positions within financial firms are of the right character and possess the necessary skills and knowledge, which ultimately contributes to promoting confidence in the financial markets and safeguarding consumers. Regulatory bodies like the FCA place a strong emphasis on this evaluation as part of their mandate to maintain high standards in financial services.

On the other hand, other choices focus on different aspects of financial regulation and firm operations. Evaluating a firm’s profitability is not directly related to individual assessments of fitness and propriety. Ownership disclosure requirements pertain to transparency in corporate governance, while determining service fees falls under pricing strategies and not individual competency assessments.