Why do I need a fit and proper test

Individuals and companies who wish to establish a bank are required to take a fit and proper test as a part of the bank formation procedure. You are required to apply for the fit and proper test if you are: sole proprietor of the business, a partner in the business, or if you are a director or nominated officer.

Fit and proper test explained

All financial service providers and financial institutions must complete a fit and proper test before their company can be registered as a legal entity. The purpose of the fit and proper test is to prevent unsuitable people from running a financial institution.

The fit and proper test is a legal check that is carried out to make sure that financial institution being established is run by capable individuals. It is also the process which determines whether or not the bank complies with the jurisdictions regulations, such as the Money Laundering Act.

A fit and proper test evaluates the suitability of those being tested in running an offshore bank, and is conducted to ensure that you have the necessary knowledge and understanding in place to run your own bank. Individuals are required to complete a fit and proper test prior to completing the banking license application. They must apply for a fit and proper test, by law, if they hold an important position in the running of the financial institution, for example: a sole proprietor or company director.

Failure to pass the fit and proper test means that the application for business registration will not be processed. This therefore means that the individual cannot continue with the registration process, until the fit and proper test application has been approved.