Regulated individuals

Approval Process

Under the Financial Services Act, Regulated Individual (RI) Firms should submit a Regulated Individual Form for each individual within an RI Firm or Audit Firm who is undertaking a regulated function, listed in Schedules 14 and 15 of the Act.

Please submit this form via E-mail to authorisations@gfsc.gi with the following information in the subject field: ‘Name of Regulated Firm – Name of Regulated Individual’ - paper copies do not need to be provided, unless indicated by the Authorisation team. 

Once a Regulated Individual Form has been submitted, the GFSC will complete and submit a Royal Gibraltar Police Vetting Application Form in accordance with Section 30C of the Proceeds of Crime Act 2015. The vetting process is conducted internally by the GFSC and bears no cost to the applicant/firm. Any applicant that has not been ordinarily resident in Gibraltar for the last ten years should provide the GFSC with a report or their criminal record from the relevant authority in the jurisdiction(s) where the applicant has spent a considerable amount of time. If the report cannot be provided in English, it should be accompanied by a translation from a certified translator.

Please note that we accept signed signature copies sent via e-mail and electronic signatures, which must originate from the Regulated Firm’s domain.  

Fit and Proper Meetings

As described in Section 95(3), Part 8 the applicant may be required to attend an interview.  The interview will usually take the form of an introductory meeting, where the applicant is not known to the GFSC, or a meeting, where the applicant is already known to the GFSC but is applying for a different regulated function.  In either case, the Authorisation team strives to provide the applicant with every opportunity to demonstrate their experience and expertise in order to place as much information as possible before the decision-maker(s).

Period of consideration

Section 98 of the Act defines the period for consideration mentioned in Section 97.  This means that the GFSC has 30 days (excluding public and bank holidays) to determine an application.  

Please note that the time period for consideration stops/starts running when the GFSC seeks additional information from another individual in order to properly determine an application.

Section 98(4) of the Act also states that in exceptional circumstances, the GFSC may extend the period for consideration.

Temporary positions

For temporary positions, RI firms must submit the temporary positions form within the RI form.  If the proposed individual is not yet a Regulated Individual, the RI firm should also submit the RI form.

Please note that a signed Warranty should be submitted in all cases and a Director’s Declaration should be completed where the temporary position is as a director.

Changes in responsibilities

Section 99, Part 8 requires that regulated individuals who have experienced a significant change in the nature or extent of responsibilities, the RI Firm must provide the GFSC with a revised statement of responsibilities and any other information that the GFSC may consider necessary.

Please use the RI form to submit the revised statement of responsibilities and any additional information requested.

A signed Warranty should accompany the change of notification form.

Duty to report to the GFSC

Please use the RI form to comply with Section 104 to enable the RI Firm to report to the GFSC: 

  • when an individual has ceased to perform the functions of a regulated individual
  • the reason why the individual has ceased to perform those function
  • any disciplinary action taken in relation to the individual's performance of those function.

 

Fitness and propriety - Policy statement

The GFSC is committed to ensuring transparency and consistency in its approach to the application of the assessment of fitness and propriety.

This policy statement sets out some of the factors that we will use to determine whether a Regulated Firm, Regulated Individual or Controller meets the applicable fitness and propriety requirements when seeking authorisation or approval or on a continuing basis in the context of ongoing supervision and enforcement. This policy statement will apply in all instances unless otherwise required by a statute.

This policy statement should be read in conjunction with our Supervisory Approach, Risk Appetite Statement and Enforcement Strategy documents.

We may from time to time change our policy on the assessment of fitness and propriety. When we do, we shall place the amended policy statement on our website.

Overview

1. The GFSC has an obligation to ensure that all Regulated Firms, Regulated Individuals or Controllers demonstrate, and continue to act with, honesty, integrity and professionalism, and do not pose a risk to the public or the jurisdiction. As such fitness and propriety requirements are fundamental to the GFSC’s Authorisation, Supervisory and Enforcement functions.

2. The Authorisations function uses the fitness and propriety requirements to assess individuals applying for licences, seeking appointment in notifiable roles or acquiring certain holdings in licensed entities. In the context of authorisation the burden of demonstrating fitness and propriety will rest on the individual concerned. The Supervisory function uses the requirements when looking at ongoing conduct. The Enforcement function uses the requirements as part of its investigation process to help assess whether a firm, licensee, notifiable role holder or controller/shareholder no longer meets the statutory requirements for holding the licence, notifiable role or ownership interest.

3. Where the fit and proper persons test is utilised by the GFSC’s Authorisations, Supervisory and/or Enforcement functions, each function will consider a Regulated Firm’s, Regulated Individuals’ or Controllers’ fitness and propriety by reference to a range of key factors focused around three basic elements:

  • Honesty, Integrity and Reputation.
  • Competence and Capability.
  • Financial position.

4. The GFSC will also take account of the activities an individual is performing or intends to perform, the licence or permission held or to be held and the markets within which they operate.

Other factors to consider

5. The GFSC will have regard to a number of factors when assessing a person’s fitness and propriety. The factors set out below are not intended to be exhaustive; not all of them will be relevant in a particular case, and there may be others that are relevant and which we will take into account. Any one or combination of factors may lead us to conclude that a Regulated Firm, Regulated Individuals or Controllers fails to meet the applicable fitness and propriety requirements.

Honesty, Integrity and Reputation:

  • Has the individual been convicted of any criminal offence?

The GFSC will be particularly concerned with offences that involve dishonesty, fraud, financial crime or an offence under legislation relating to money laundering, consumer protection or specific areas of financial services.

There will be a presumption that an individual convicted of an offence that involves dishonesty, fraud, financial crime or an offence under legislation relating to money laundering will not meet the fitness and propriety requirements.

  • Has the individual been subject to any investigations or adverse findings in civil or in disciplinary proceedings?

The GFSC will be particularly concerned with investigations or findings that relate to misconduct, fraud or are connected to financial businesses or with the contravention of regulatory requirements.

There will be a presumption that an individual subject to a finding that directly relates to fraud will not meet the fitness and propriety requirements.

  • Has the individual behaved in a way that is not compatible with that expected of a Regulated Firm or Regulated Individual?

The GFSC will take into account behaviour which is dishonest, which is violent, where there is evidence of discrimination towards others, where an individual has misused their position to obtain pecuniary advantage or misused a position of trust.

  • Has the individual been truthful and candid in their dealings with the GFSC or any other regulator, professional body or government body or agency?

The GFSC will expect Regulated Firms and Regulated Individuals to disclose any matters that have occurred in the Gibraltar and/or overseas.

Knowingly or recklessly providing false or incomplete information or failure to disclose material information will be treated as prima facie evidence of dishonest behaviour and will raise a presumption that an individual will not meet the fitness and propriety requirements.

Competence and Capability:

  • Does the individual possess the adequate knowledge, skills, experience and capability to understand the firm's activities and properly execute their responsibilities?

The GFSC will take into account any relevant qualifications, previous or current training, experience within similar roles, time available to perform the function, the size of the firm and type of work undertaken, the overall level of competence and any relevant personal characteristics.

Financial position:

  • Has the individual, as an individual or as a director, partner or manager of a business, made any arrangements with creditors, filed for or been adjudged bankrupt, had a bankruptcy petition served on them, been the subject of a bankruptcy order or undertaking or otherwise had assets sequestrated?

The GFSC will be particularly concerned with events covered in Gibraltar under the Insolvency Act 2011 and any matters that relate to bankruptcy, insolvency, liquidation, administration or voluntary arrangements in Gibraltar and/or overseas.

There will be a presumption that an individual who has been the of subject of matters that relate to bankruptcy, insolvency, liquidation, administration or voluntary arrangements in Gibraltar and/or overseas will not meet the fitness and propriety requirements.

Evidence

6. When considering those factors which raise a presumption that the fitness and propriety requirements have not been met, the individual will be required to demonstrate to the GFSC how they meet the requirements.

7. At the application stage, where the presumption is raised, the applicant will need to submit a full statement setting out any exceptional circumstances, any evidence of rehabilitation and an independent report or details of an independent professional person who the GFSC can contact for a reference.

8. At the supervision or enforcement stage, where the presumption is raised, the GFSC may use the failure to meet the fitness and propriety requirements as evidence that a risk is posed to the public or the jurisdiction. In those instances the GFSC will require evidence demonstrating that the individual has not fallen below the requisite level.

Rehabilitation

9. It is for the individual to demonstrate that they have undergone successful rehabilitation, where relevant. The individual circumstances put forward must be weighed against the public interest and the need to safeguard members of the public and maintain the reputation of the jurisdiction. We will consider each application on its own merits.

Failure to Meet Requirements

10. The failure by a Regulated Firm, Regulated Individuals or Controllers to meet the fitness and propriety requirements can be expected to result in refusal of approving the regulated activity or an application, revocation of a permission, authorisation or status as a Regulated Individual or Controller or other regulatory action by GFSC.

Ongoing Reporting

11. All Regulated Firms, Regulated Individuals or Controllers are required to continue to meet the fitness and propriety requirements on an ongoing basis. If there is a change in an individual’s circumstances which could or may cause the GFSC to believe that the individual has fallen below the fitness and propriety threshold the individual and, where relevant, the firm must promptly notify the GFSC. Failure to do so will be regarded as lack of candour in the individual’s and/or firm’s dealings with the GFSC.