• GEN 5. GEN 5. AUTHORISATION AND THRESHOLD CONDITIONS

    • GEN 5.1 GEN 5.1 Application

      • GEN 5.1.1 GEN 5.1.1

        (1) This Chapter applies, subject to (2), to every Person who is:
        (a) an Authorised Person;
        (b) an applicant for a Financial Services Permission;
        (c) an Approved Person;
        (d) an applicant for Approved Person status;
        (e) a Recognised Person;
        (f) an applicant for Recognised Person status; or
        (g) a Controller of a Person referred to in (a) or (b).
        (2) This Chapter does not apply to Recognised Bodies or operators of a Representative Office.
        (3) Upon the granting of a Financial Services Permission to an applicant, such applicant will be required to satisfy the requirements of the provisions in this Chapter on an on-going basis.

        • Guidance

          1. This Chapter outlines the authorisation requirements for an Authorised Person, an Approved Person and a Recognised Person
          2. The Regulator's requirements for authorisation of:
          a. Recognised Bodies are covered by MIR; and
          b. Representative Offices are covered by Chapter 9.
          3. This Chapter should be read in conjunction with the GPM which sets out the Regulator's general regulatory policy and processes. Some additional processes may be outlined in other Chapters of this Rulebook.
          4. The GPM sets out the Regulator's approach to the authorisation of Undertakings and individuals to conduct Regulated Activities, Controlled Functions or Recognised Functions, as the case may be.
          Amended on (3 February, 2020).

    • GEN 5.2 GEN 5.2 Application for a Financial Services Permission

      • GEN 5.2.1

        A Person, who intends to carry on one or more Regulated Activities in or from the ADGM must apply to the Regulator for a Financial Services Permission, in accordance with the provisions in this Rule. Where the Person becomes aware of a material change in circumstances that is reasonably likely to be relevant to such an application whilst it is under consideration by the Regulator, then it must inform the Regulator in writing of the change without delay.

      • GEN 5.2.2 GEN 5.2.2

        (1) The Regulator will only consider an application for a Financial Services Permission from a Person who, subject to (2), (3) and (4), is:
        (a) a Body Corporate; or
        (b) a Partnership;
        and who is not a Recognised Body.
        (2) If the application is in respect of either or both of the following Regulated Activities:
        (a) Effecting Contracts of Insurance; or
        (b) Carrying Out Contracts of Insurance as Principal;
        the applicant must be a Body Corporate.
        (3) If the application is in respect of the Regulated Activity of Accepting Deposits, the applicant must be a Body Corporate or a Partnership.
        (4) If the application is in respect of the Regulated Activity of Acting as the Trustee of an Investment Trust, the applicant must be a Body Corporate.

        • Guidance

          The GPM sets out matters which the Regulator takes into consideration when making an assessment under Rule 5.2.2.

      • Carrying on service with or for a Retail Client

        • GEN 5.2.3

          The following requirements must be met by an Authorised Person applying for a Financial Services Permission to carry on a Regulated Activity with or for a Retail Client:

          (a) the applicant must have adequate systems and controls for carrying on Regulated Activities with or for a Retail Client;
          (b) the applicant must have adequate systems and controls (including policies and procedures) to ensure compliance with the requirements in COBS relevant to Retail Clients;
          (c) the applicant must have adequate systems and controls to ensure that its Employees remain competent and capable to perform the functions which are assigned to them, in particular, functions that involve dealing with Retail Clients; and
          (d) the applicant must have adequate Complaints handling policies and procedures.

      • Acting as a Trade Repository

        • GEN 5.2.4 GEN 5.2.4

          The requirements in Appendix 2 must be met by an Authorised Person whose Financial Services Permission includes a designation permitting the Authorised Person to maintain a Trade Repository.

          • Guidance

            1. Maintaining a Trade Repository is not a separate Regulated Activity but may be carried on by an Authorised Person or Recognised Body which has a Financial Services Permission with a designation permitting it to do so. An Authorised Person or Recognised Body maintaining a Trade Repository is subject to some specific requirements relating to that activity, which are set out in Appendix 2.
            2. The functions of a Trade Repository promote increased transparency and integrity of information, particularly for centrally clearing OTC Derivatives. Currently there are transaction reporting requirements in the ADGM under section 146 of the FSMR which require reporting to Trade Repositories.
            3. An Authorised Person or Recognised Body does not carry on the activities of a Trade Repository to the extent that it maintains records of transactions pursuant to the record keeping requirements applicable to that Authorised Person or Recognised Body (such as those relating to transactions carried out on behalf of the Authorised Person's Clients, or transactions carried out on the facilities of a Recognised Body).

        • GEN 5.2.5

          A Person licensed by the Emirates Securities and Commodities Authority to trade on an U.A.E. exchange will not be granted a Financial Services Permission by the Regulator unless that Person has the prior approval of the Emirates Securities and Commodities Authority.

        • GEN 5.2.6 GEN 5.2.6

          A Person applying for a Financial Services Permission must make an application in such form as the Regulator shall prescribe.

          • Guidance

            A Person submitting an application under Rule 5.2.6 is required to:

            a. pay the appropriate application fee as set out in FEES; and
            b. include information relating to its Controllers, completed by the relevant Controllers themselves, in such form as the Regulator shall prescribe.

      • Consideration and assessment of applications

        • GEN 5.2.7

          In order to become authorised to carry on one or more Regulated Activities, the applicant must demonstrate to the satisfaction of the Regulator that it:

          (a) has adequate and appropriate resources, including financial resources;
          (b) is fit and proper;
          (c) is capable of being effectively supervised; and
          (d) has adequate compliance arrangements, including policies and procedures, that will enable it to comply with all the applicable legal requirements, including the Rules.

      • Adequate and appropriate resources

        • GEN 5.2.8 GEN 5.2.8

          (1) In assessing whether an applicant has adequate and appropriate financial resources, the Regulator will consider:
          (a) how the applicant will comply with the applicable provisions of PRU or PIN;
          (b) the provision the applicant makes, or, if the applicant is a member of a Group, which other members of the Group make, in respect of any liabilities, including contingent and future liabilities;
          (c) the means by which the applicant or, if the applicant is a member of a Group, by which other members of the Group manage the incidence of risk in connection with their business;
          (d) the rationale for, and basis of, the applicant's business plan;
          (e) whether the applicant's assets are appropriate given the applicant's liabilities;
          (f) the liquidity of the applicant's resources;
          (g) the nature and scale of the business which will be carried on by the applicant;
          (h) the risks to the continuity of the services which will be provided by the applicant;
          (i) the applicant's membership of a Group and any effect which that membership may have; and
          (j) whether the applicant is capable of meeting its debts as they fall due.
          (2) In assessing whether an applicant has adequate and appropriate non-financial resources, the Regulator will consider:
          (a) the skills and experience of those who will manage the applicant's affairs;
          (b) the applicant's willingness and ability to value its assets and liabilities and its resources to identify, monitor, measure and take action to remove or reduce risks as to the accuracy of such valuation;
          (c) the applicant's resources to identify, monitor, measure and take action to remove or reduce risks as to its safety and soundness;
          (d) the effectiveness of the applicant's business management; and
          (e) whether the applicant's non-financial resources are sufficient to enable the applicant to comply with:
          (i) requirements imposed or likely to be imposed on the applicant by the Regulator in the exercise of its functions; or
          (ii) any other requirement in relation to whose Contravention the Regulator would be concerned for the purpose of any provision of Part 19 of the FSMR.

          • Guidance

            A Credit Rating Agency is not subject to any specific capital requirements in PRU. Instead, it is required, pursuant to Rules 2.2.4 and 5.2.8 to have and maintain adequate financial resources to manage its affairs prudently and soundly.

      • Fitness and propriety

        • GEN 5.2.9

          (1) In assessing whether an applicant is fit and proper, the Regulator will consider:
          (a) the fitness and propriety of the members of its Governing Body;
          (b) the applicant's connection with any person or membership of any Group;
          (c) the suitability of the applicant's Controllers or any other Person;
          (d) the impact a Controller might have on the applicant's ability to comply with the applicable requirements;
          (e) the Regulated Activities concerned and the risks to their continuity;
          (f) the nature (including the scale and complexity) of the activities of the applicant and any associated risks that those activities pose to the Regulator's objectives described under section 1(3) of the FSMR;
          (g) whether the applicant's business model will allow for its affairs and business to be conducted and managed in a sound and prudent manner, having regard in particular to the interests of consumers and the integrity of the ADGM;
          (h) whether those who manage the applicant's affairs in accordance with (g) will have adequate skills and experience and will act with probity;
          (i) any matter which may harm or may have harmed the integrity or the reputation of the Regulator or ADGM, including through the carrying on of a business by the applicant for a purpose connected with a Financial Crime; and
          (j) any other relevant matters.
          (2) The Regulator will, in assessing the matters in (1), consider the cumulative effect of factors which, if taken individually, may be regarded as insufficient to give reasonable cause to doubt the fitness and propriety of an applicant.

      • Effective supervision

        • GEN 5.2.10

          (1) In assessing whether an applicant is capable of being effectively supervised by the Regulator, the Regulator will consider:
          (a) the nature, including the complexity, of the Regulated Activities that the applicant will carry on;
          (b) the complexity of any products that the applicant will provide in carrying on those activities;
          (c) the way in which the applicant's business is organised;
          (d) if the applicant is a member of a Group, whether membership of the Group is likely to prevent the Regulator's effective supervision of the applicant; and
          (e) whether the applicant is subject to consolidated supervision.

      • Compliance arrangements

        • GEN 5.2.11

          In assessing whether an applicant has adequate compliance arrangements, the Regulator will consider whether it has:

          (a) clear and comprehensive policies and procedures relating to compliance with all applicable legal requirements including the Rules; and
          (b) adequate means to implement those policies and procedures and monitor that they are operating effectively and as intended.

        • GEN 5.2.12

          In assessing an application for a Financial Services Permission, the Regulator may:

          (a) make any enquiries which it considers appropriate, including enquiries independent of the applicant;
          (b) require the applicant to provide additional information;
          (c) require the applicant to have information on how it intends to ensure compliance with a particular Rule;
          (d) require any information provided by the applicant to be verified in any way that the Regulator specifies; and
          (e) take into account any information which it considers relevant in determining whether the applicant will ensure compliance with requirements imposed by the Regulator in the exercise of its functions.

        • GEN 5.2.13

          (1) In assessing an application for a Financial Services Permission the Regulator may, by means of written notice, indicate the legal form that the applicant may adopt to enable authorisation to be granted.
          (2) Where the Regulator thinks it appropriate it may treat an application made by one legal form or Person as having been made by the new legal form or Person.

        • GEN 5.2.14

          In assessing an application for a Financial Services Permission authorising the applicant to Operate a Multilateral Trading Facility or an Organised Trading Facility, the Regulator will have regard to, but is not limited to, considering the following matters:

          (a) whether the establishment of a Multilateral Trading Facility or Organised Trading Facility is, or is likely to be, in the interests of the Financial Services and Markets industry;
          (b) whether the Multilateral Trading Facility or Organised Trading Facility will or is likely to lead to more efficient price discovery of, or deepen liquidity in, an Investment; and
          (c) whether there is any risk of market fragmentation, loss of liquidity or inefficiency in price discovery as a result of the proposed Multilateral Trading Facility or Organised Trading Facility operation.

    • GEN 5.3 GEN 5.3 Controlled Functions and Approved Persons

      • GEN 5.3.1 GEN 5.3.1

        (1) Pursuant to Part 5 of the FSMR, the functions specified in Rules 5.3.2 to 5.3.4 are Controlled Functions.
        (2) Performance of Controlled Functions are subject to approval by the Regulator.
        (3) Where an individual is approved pursuant to Rule 5.3.1(2) or has his Controlled Function withdrawn or varied, the Authorised Person must notify the Regulator in writing within 10 days of such approval, withdrawal or variation.
        (4) A Controlled Function shall not include a function performed by a registered insolvency practitioner (subject to the restrictions defined within section 289 of the Insolvency Regulations 2015) if the practitioner is:
        (a) appointed as a receiver or administrative receiver within the meaning of Part 2 of the Insolvency Regulations 2015;
        (b) appointed as a liquidator in relation to a members' voluntary Winding-Up within the meaning of Chapter 3 of Part 3 of the Insolvency Regulations 2015;
        (c) appointed as a liquidator in relation to a creditors' voluntary Winding-Up within the meaning of Chapter 4 of Part 3 of the Insolvency Regulations 2015; or
        (d) appointed as a liquidator or provisional liquidator in relation to a compulsory Winding-Up within the meanings of Chapter 6 of Part 3 of the Insolvency Regulations 2015.
        (5) A Controlled Function shall not include a function performed by an individual appointed to act as manager of the business of an Authorised Person or Recognised Body.

        • Guidance

          The Regulator will approve an Approved Person for the performance of Controlled Functions. However, the Regulator expects that the Authorised Person will carry out proper due diligence to satisfy itself that the individual will be able to carry out his role effectively, is fit and proper to do so, and that there are no conflicts of interest or that any actual or potential conflicts of interest are appropriately managed.

      • Senior Executive Officer

        • GEN 5.3.2

          The Senior Executive Officer function is carried out by an individual who:

          (a) has, either alone or jointly with other Approved Persons, ultimate responsibility for the day-to-day management, supervision and control of one or more (or all) parts of an Authorised Person's Regulated Activities carried on in or from the ADGM; and
          (b) is a Director, Partner or Senior Manager of the Authorised Person.

      • Licensed Director

        • GEN 5.3.3

          Subject to Rule 5.5.4, the Licensed Director function is carried out by an individual who is a Director of an Authorised Person which is a Body Corporate.

      • Licensed Partner

        • GEN 5.3.4

          The Licensed Partner function is carried out, in the case of an Authorised Person which is a Partnership, by an individual specified in Rule 5.5.5.

        • GEN 5.3.5 GEN 5.3.5

          An Approved Person may perform one or more Controlled Functions for one or more Authorised Persons. Carrying on a Controlled Function does not prevent a Person from also performing any Recognised Function.

          • Guidance

            1. In considering whether to grant an individual Approved Person status with respect to more than one Authorised Person, the Regulator will consider each Controlled Function and any Recognised Function to be carried out and the allocation of responsibility for that individual among the relevant Authorised Persons. In this situation the Regulator will need to be satisfied that the individual will be able to carry out his roles effectively, is fit and proper to do so, and that there are no conflicts of interest or that any actual or potential conflicts of interest are appropriately managed.

    • GEN 5.4 GEN 5.4 Recognised Functions and Recognised Persons

      • GEN 5.4.1

        Pursuant to Part 5 of FSMR, the functions as listed in Rules 5.4.5 to 5.4.9 are Recognised Functions.

      • GEN 5.4.2

        Performance of Recognised Functions shall be subject to approval by the relevant Authorised Person in respect of which the Recognised Function is to be performed.

      • GEN 5.4.3

        Where an individual is approved pursuant to 5.4.2 or has his Recognised Function varied, the Authorised Person must notify the Regulator in writing within 10 days of such approval or variation.

        Amended on (3 February, 2020).

      • GEN 5.4.4 GEN 5.4.4

        A Recognised Function shall not include a function performed by a registered insolvency practitioner (subject to the restrictions defined within section 289 of the Insolvency Regulations 2015) if the practitioner is:

        (a) appointed as a receiver or administrative receiver within the meaning of Part 2 of the Insolvency Regulations 2015;
        (b) appointed as a liquidator in relation to a members' voluntary Winding-Up within the meaning of Chapter 3 of Part 3 of the Insolvency Regulations 2015;
        (c) appointed as a liquidator in relation to a creditors' voluntary Winding-Up within the meaning of Chapter 4 of Part 3 of the Insolvency Regulations 2015; or
        (d) appointed as a liquidator or provisional liquidator in relation to a compulsory Winding-Up within the meanings of Chapter 6 of Part 3 of the Insolvency Regulations 2015.

        • Finance Officer


      • GEN 5.4.5 GEN 5.4.5

        The Finance Officer function is carried out by an individual who is a Director, Partner or Senior Manager of an Authorised Person who has responsibility for the Authorised Person's compliance with the applicable Rules in PRU or PIN.

        • Compliance Officer


      • GEN 5.4.6 GEN 5.4.6

        The Compliance Officer function is carried out by an individual who is a Director, Partner or Senior Manager of an Authorised Person who has responsibility for compliance matters in relation to the Authorised Person's Regulated Activities.

        • Senior Manager


      • GEN 5.4.7 GEN 5.4.7

        The Senior Manager function is carried out by an individual who is responsible either alone or jointly with other individuals for the management, supervision or control of one or more parts of an Authorised Person's Regulated Activities who is:

        (a) an Employee of the Authorised Person; and
        (b) not a Director or Partner of the Authorised Person.

        • Guidance

          In respect of a Fund, the Regulator would expect the Fund Manager to appoint at least one individual other than the Senior Executive Officer to carry out Senior Manager functions in relation to the Fund such as managing operational risk and other internal controls.

      • Money Laundering Reporting Officer


        • GEN 5.4.8

          The Money Laundering Reporting Officer function is carried out by an individual who is a Director, Partner or Senior Manager of an Authorised Person and who has responsibility for the implementation of an Authorised Person's anti-money laundering policies, procedures, systems and controls and day to day oversight of its compliance with the Rules in AML and any relevant anti-money laundering Rules.

      • Responsible Officer

        • GEN 5.4.9 GEN 5.4.9

          The Responsible Officer function is carried out by an individual who:

          (a) has significant responsibility for the management of one or more aspects of an Authorised Person's affairs;
          (b) exercises a significant influence on the Authorised Person as a result of (a); and
          (c) is not an Employee of the Authorised Person.

          • Guidance

            1. The Recognised Function of a Responsible Officer applies to an individual employed by a Controller or other Group company who is not an Employee of the Authorised Person, but who has significant responsibility for, or for exercising a significant influence on, the management of one or more aspects of the Authorised Person's business.
            2. Examples of a Responsible Officer might include an individual responsible for the overall strategic direction of an Authorised Person or a regional manager to whom a Senior Executive Officer reports and from whom he takes direction.

      • GEN 5.4.10 GEN 5.4.10

        An Authorised Person must notify the Regulator prior to approval of an individual, for one or more Recognised Functions, when the individual is currently an Approved Person or Recognised Person for one or more other Authorised Persons.

        • Guidance

          1. The Regulator expects an Authorised Person when considering whether to approve an individual as a Recognised Person and who is already an Approved Person or Recognised Person with one or more other Authorised Persons, will consider each Recognised Function and any Controlled Functions to be carried out and the allocation of responsibility for that individual among the relevant Authorised Persons.
          2. The Regulator also expects that the Authorised Person will assess whether the individual will be able to carry out his roles effectively, is fit and proper to do so, and that there are no conflicts of interest or that any actual or potential conflicts of interest are appropriately managed.

    • GEN 5.5 GEN 5.5 Mandatory appointments

      • GEN 5.5.1 GEN 5.5.1

        (1) An Authorised Person must, subject to (2), make the following appointments and ensure that they are held by one or more Approved Persons or Recognised Persons at all times:
        (a) Senior Executive Officer;
        (b) Finance Officer;
        (c) Compliance Officer; and
        (d) Money Laundering Reporting Officer.
        (2) An Authorised Person which is a Credit Rating Agency:
        (a) need not make the appointments referred to in (1)(b) and (d); and
        (b) must ensure that the appointments referred to in (1)(a) and (c) are held by separate persons at all times.

        • Guidance

          1. This Guidance addresses a range of circumstances:
          a. one individual performing more than one function in a single Authorised Person, as contemplated in Rule 5.5.1;
          b. more than one individual performing one function in a single Authorised Person, not addressed by that Rule; and
          c. one individual performing a single function in more than one Authorised Person, also not addressed by that Rule.
          2. The Regulator or relevant Authorised Person, as applicable, will only authorise an individual to perform more than one Controlled Function or Recognised Function or combine Controlled Functions with other functions (including Recognised Functions) where it is satisfied that the individual is fit and proper to perform each Controlled Function, Recognised Function or combination of Controlled Functions and Recognised Functions.
          3. In the above situation the Regulator or relevant Authorised Person, as applicable, will need to be satisfied that the individual will be able to carry out his role effectively, is fit and proper to do so, and that there are no conflicts of interest or that any actual or potential conflicts of interest are appropriately managed.
          4. Notwithstanding this Rule, an Authorised Person would generally be expected to separate the roles of Compliance Officer and Senior Executive Officer. In addition, the roles of Compliance Officer, Finance Officer and Money Laundering Reporting Officer would not be expected to be combined with any other Controlled Functions or Recognised functions unless appropriate monitoring and control arrangements independent of the individual concerned will be implemented by the Authorised Person. This may be possible in the case of a Branch, where monitoring and controlling of the individual (carrying out more than one role in the Branch) is conducted from the Authorised Person's home state by an appropriate individual for each of the relevant Controlled Functions or Recognised Functions, as applicable. However, it is recognised that, on a case by case basis, there may be exceptional circumstances in which this may not always be practical or possible.
          5. In what it considers to be exceptional circumstances, the relevant Authorised Person may register more than one individual to perform the Controlled Function of Compliance Officer in respect of different internal business divisions within that Authorised Person, particularly where it is large in size. In this regard the relevant Authorised Person may consider, amongst other things, the nature, scale and complexity of its activities, the clarity of demarcation between areas of responsibility, the potential for gaps in responsibility, and processes of communication with the Regulator.
          6. More than one Authorised Person may also register the same individual as its Compliance Officer. This will only be performed where the Authorised Persons concerned are satisfied that the individual is able to carry out his functions effectively in each Authorised Person taking into consideration factors such as the amount and nature of business conducted by the Authorised Persons. Each Authorised Person has a duty under Rules 3.3.7 to 3.3.12 to monitor its compliance arrangements to ensure, as far as reasonably practicable, that it complies with all Regulations and Rules.

      • GEN 5.5.2 GEN 5.5.2

        The Approved Persons or Recognised Persons referred to in Rule 5.5.1(1)(a), (c) and (d) must be resident in the U.A.E.

        • Guidance

          1. In appropriate circumstances, the Regulator may waive the requirement for a Compliance Officer or Money Laundering Reporting Officer to be resident in the U.A.E. In determining whether to grant a waiver, the Regulator will consider a range of factors on a case by case basis focused on whether the Authorised Person can demonstrate that it has appropriate compliance arrangements (see Rules 3.3.7 to 3.3.12). These factors may include, but are not limited to: the nature, scale and complexity of the activities of the Authorised Person; the ability of a remote officer to carry out his functions in differing time zones and a differing working week; the size, resourcing and capabilities of a remote compliance function; the ability of a remote officer to liaise and communicate readily with the Regulator; and the competency and capability of a remote officer and whether the remote officer is able effectively to undertake or supervise regular compliance monitoring and keep up to date with applicable Rules.
          2. The Regulator will also take into account factors such as the relevant regulatory experience of the proposed Approved Person or Recognised Person, as applicable, and whether the applicant Authorised Person has previously been subject to financial services regulation.

      • GEN 5.5.3

        In the case of a Trust Service Provider, the Recognised Persons referred to in Rule 5.5.1(1)(c) and (d) must not act also as trustees on behalf of the Trust Service Provider.

      • GEN 5.5.4

        An Authorised Person which is a Body Corporate whose head office and registered office are located in the ADGM, must register with the Regulator all of its Directors as Licensed Directors.

      • GEN 5.5.5 GEN 5.5.5

        (1) In the case of an Authorised Person which is a Partnership established under either the Limited Liability Partnership Regulations 2015 or the Partnership Act 1890, the Licensed Partner function must be carried out by:
        (a) each individual Partner who must be registered as a Licensed Partner; and
        (b) in the case of a Partner which is a Body Corporate, by an individual nominated by that Body Corporate and registered as a Licensed Partner to act on its behalf.

        • Guidance

          An Authorised Person that is a Branch is not required to register its Directors as Licensed Directors under Rule 5.5.4 or its Partners as Licensed Partners under Rule 5.5.5.

    • GEN 5.6 GEN 5.6 Application for Approved Person status

      • GEN 5.6.1

        In submitting applications to the Regulator for Approved Person status in respect of the Controlled Functions, the Authorised Person must make applications in such form as the Regulator shall prescribe.

      • GEN 5.6.2

        Applicants for Approved Person status must countersign or otherwise consent to an application.

      • GEN 5.6.3

        When an Authorised Person applies to the Regulator, for that individual to be an Approved Person, the individual must satisfy the Regulator and the Authorised Person that he is a fit and proper person to carry out the role.

      • Consideration and assessment of applications

        • GEN 5.6.4 GEN 5.6.4

          An individual will only be authorised to carry on one or more Controlled Functions if the Regulator is satisfied that the individual is fit and proper to be an Approved Person. In making this assessment, the Regulator will consider:

          (a) the individual's integrity;
          (b) the individual's competence and capability;
          (c) the individual's financial soundness;
          (d) the individual's proposed role within the Authorised Person; and
          (e) any other relevant matters.

          • Guidance

            The GPM sets out matters which the Regulator takes into consideration when making an assessment of the kind under Rule 5.6.4.

        • GEN 5.6.5

          In Rule 5.6.4, an individual may not be considered as fit and proper where:

          (a) he is bankrupt;
          (b) he has been convicted of a serious criminal offence; or
          (c) he is incapable, through mental or physical incapacity, of managing his affairs.

        • GEN 5.6.6

          In assessing an application for Approved Person status, the Regulator may:

          (a) make any enquiries which it considers appropriate, including enquiries independent of the applicant;
          (b) require the individual or Authorised Person to provide additional information;
          (c) require any information provided in accordance with (b) or otherwise to be verified in any way specified by the Regulator; and
          (d) take into account any information which it considers appropriate.

        • GEN 5.6.7

          An Authorised Person must not permit an individual to perform a Controlled Function on its behalf, except as permitted by Rule 8.6, unless that individual is an Approved Person who has been assessed by the Authorised Person as competent to perform that Controlled Function in accordance with Rule 5.6.8.

        • GEN 5.6.8

          In assessing the competence of an individual, an Authorised Person must:

          (a) obtain details of the knowledge and skills of the individual in relation to the knowledge and skills required for the role;
          (b) take reasonable steps to verify the relevance, accuracy and authenticity of any information acquired;
          (c) determine whether the individual holds any relevant qualifications with respect to the Controlled Function or Controlled Functions performed, or proposed to be to performed, within the Authorised Person;
          (d) determine the individual's relevant experience; and
          (e) determine the individual's knowledge of the Authorised Person's relevant systems and procedures with respect to the type of business that is to be, or is being, conducted by the individual on behalf of the Authorised Person.

        • GEN 5.6.9

          An Authorised Person must be satisfied that an Approved Person:

          (a) continues to be competent in his proposed role;
          (b) has kept abreast of relevant market, product, technology, legislative and regulatory developments; and
          (c) is able to apply his knowledge.

        • GEN 5.6.10 GEN 5.6.10

          The Authorised Person is responsible for the conduct of its Approved Persons and for ensuring that they remain fit and proper to carry out their role.

          • Guidance

            In considering whether an Approved Person remains fit and proper, the Authorised Person should consider those matters in the GPM and the notification requirements in Rule 8.10.

        • GEN 5.6.11

          Before lodging an application with the Regulator to perform a Controlled Function, an Authorised Person must make reasonable enquiries as to an individual's fitness and propriety to carry out a Controlled Function.

        • GEN 5.6.12

          An Authorised Person must not lodge an application in accordance with Rule 5.6.1 if it has reasonable grounds to believe that the individual is not fit and proper to carry out the Controlled Function.

      • Systems and controls

        • GEN 5.6.13

          An Authorised Person must have appropriate arrangements in place to ensure that an individual assessed as being competent under Rule 5.6.8 maintains his competence.

        • GEN 5.6.14 GEN 5.6.14

          An Authorised Person must ensure, in the case of individuals seeking to perform the Controlled Function of Senior Executive Officer that such individuals are able to demonstrate sufficient knowledge of relevant anti-money laundering requirements.

          • Guidance

            In considering whether individuals have sufficient knowledge of relevant anti-money laundering requirements, the Authorised Person may be satisfied where the individual can demonstrate receipt of appropriate training specifically relevant to such requirements.

        • GEN 5.6.15 GEN 5.6.15

          An Authorised Person must establish and maintain systems and controls which will enable it to comply with Rules 5.6.7 to 5.6.10.

          • GEN 5.6.16

            (1) An Authorised Person must keep records of the assessment process undertaken for each individual under this Chapter.
            (2) These records must be kept for a minimum of six years from the date of the assessment.

    • GEN 5.7 GEN 5.7 Application for Recognised Person status

      • GEN 5.7.1

        Appointment of new Recognised Persons must be made in accordance with applicable governance procedures and policies of the Authorised Person.

      • GEN 5.7.2

        The Authorised Person must be satisfied that an individual candidate for Recognised Person status is a fit and proper person to carry out the role.

      • Consideration and assessment of applications

        • GEN 5.7.3 GEN 5.7.3

          An individual shall only be approved to carry on one or more Recognised Functions if the Authorised Person is satisfied that the individual is fit and proper to be a Recognised Person. In making this assessment, the Authorised Person must consider:

          (a) the individual's integrity;
          (b) the individual's competence and capability;
          (c) the individual's financial soundness;
          (d) the individual's proposed role within the Authorised Person; and
          (e) any other relevant matters.

          • Guidance

            Authorised Persons may refer to the GPM for more detail as to how these requirements may be interpreted.

        • GEN 5.7.4

          In Rule 5.7.3, an individual may not be considered as fit and proper where:

          (a) he is bankrupt;
          (b) he has been convicted of a serious criminal offence; or
          (c) he is incapable, through mental or physical incapacity, of managing his affairs.

        • GEN 5.7.5

          In assessing an application for Recognised Person status, the Authorised Person may:

          (a) make any enquiries which it considers appropriate, including enquiries independent of the applicant;
          (b) require the individual to provide additional information;
          (c) require any information provided in accordance with (b) or otherwise to be verified in any way as it chooses to specify; and
          (d) take into account any information which it considers appropriate.

        • GEN 5.7.6

          An Authorised Person must not permit an individual to perform a Recognised Function on its behalf, except as permitted by Rule 8.6 or with the consent of the Regulator, unless that individual is a Recognised Person who has been assessed by the Authorised Person as competent to perform that Recognised Function in accordance with Rule 5.7.5.

        • GEN 5.7.7

          In assessing the competence of an individual, an Authorised Person must:

          (a) obtain details of the knowledge and skills of the individual in relation to the knowledge and skills required for the role;
          (b) take reasonable steps to verify the relevance, accuracy and authenticity of any information acquired;
          (c) determine whether the individual holds any relevant qualifications with respect to the Recognised Function or Recognised Functions performed, or proposed to be to performed, within the Authorised Person;
          (d) determine the individual's relevant experience; and
          (e) determine the individual's knowledge of the Authorised Person's relevant systems and procedures with respect to the type of business that is to be, or is being, conducted by the individual on behalf of the Authorised Person.

        • GEN 5.7.8

          An Authorised Person must be satisfied that a Recognised Person:

          (a) continues to be competent in his proposed role;
          (b) has kept abreast of relevant market, product, technology, legislative and regulatory developments; and
          (c) is able to apply his knowledge.

        • GEN 5.7.9 GEN 5.7.9

          The Authorised Person is responsible for the conduct of its Recognised Persons and for ensuring that they remain fit and proper to carry out their role.

          • Guidance

            In considering whether a Recognised Person remains fit and proper, the Authorised Person should consider the guidance applicable to Approved Persons in the GPM and the notification requirements in Rule 8.10.

        • GEN 5.7.10

          Before appointing an individual as a Recognised Person approved to carry out Recognised Functions, an Authorised Person must make reasonable enquiries as to an individual's fitness and propriety to carry out a Recognised Function.

        • GEN 5.7.11

          An Authorised Person must not appoint an individual as a Recognised Person if it has reasonable grounds to believe that the individual is not fit and proper to carry out the Recognised Function.

      • Systems and controls

        • GEN 5.7.12

          An Authorised Person must have appropriate arrangements in place to ensure that an individual assessed as being competent under Rule 5.7.7 maintains his competence.

        • GEN 5.7.13 GEN 5.7.13

          An Authorised Person must ensure, in the case of individuals seeking to perform the Recognised Functions of Money Laundering Reporting Officer or Compliance Officer, that such individuals are able to demonstrate sufficient knowledge of relevant anti-money laundering requirements.

          • Guidance

            In considering whether individuals have sufficient knowledge of relevant anti-money laundering requirements, the Authorised Person may be satisfied where the individual can demonstrate receipt of appropriate training specifically relevant to such requirements.

        • GEN 5.7.14

          An Authorised Person must establish and maintain systems and controls which will enable it to comply with Rules 5.7.6 to 5.7.9.

        • GEN 5.7.15

          (1) An Authorised Person must keep records of the assessment process undertaken for each individual under this Chapter.
          (2) These records must be kept for a minimum of six years from the date of the assessment.