Fitness and propriety in financial services in the 21st century

Publication Date01 February 2000
Pages109-117
Date01 February 2000
DOIhttps://doi.org/10.1108/eb025035
AuthorJohn Virgo,Philip Ryley
SubjectAccounting & finance
Journal of Financial Regulation and Compliance Volume 8 Number 2
Papers
Fitness and propriety in financial services
in the 21st century
John Virgo* and Philip Ryley
Received (in revised form): 3rd April, 2000
*Ringrose Wharton & Co, 5 Queen Square, Bristol BS1 4JQ; Fax: +44 (0) 117 922 6983;
e-mail: john.virgo@guildhalIchambers.co.uk
John Virgo was called to the Bar in 1983
and has developed a specialist practice in
professional negligence litigation. A major
part of this work has centred on financial
services disputes both litigious and reg-
ulatory. He acts both for the industry and
investors, which preserves a sense of
bal-
ance when advising on such issues.
Recent reported decisions include Cocking
-v-
Prudential at 1996 Occupational Pen-
sion Law Reports 35 and Hale & Hale -v-
Guildarch Ltd & Ors at 1999 Professional
Negligence Law Reports 44.
Philip Ryley is a solicitor and Head of the
Pensions and Financial Services Unit at
Ringrose Wharton, Bristol. He specialises
in contentious issues within the financial
services and pensions sectors and is
regarded as an authority on the pensions
mis-selling litigation. He is FPC qualified
and an Associate of the Compliance
Insti-
tute. He manages a team of solicitors who
act for life companies, networks, indepen-
dent financial advisers and investors.
ABSTRACT
'Fitness
and
propriety' is a key qualifying
condi-
tion of authorisation under the Financial Services
and Markets Bill. Blandly
stated,
it is probably
uncontroversial as a condition of authorisation.
How, in
practice,
fitness
and
propriety should be
demonstrated
to, inquired into and verified by the
Financial Services Authority
raise
more difficult
issues. This paper looks at the way in which
these
practical
issues have been
addressed
by the
courts and other regulatory regimes in the past.
While past experience
does
not form a model for
future guidance on these topics, it is a useful
starting point from which to consider the draft
Bill's
approach
to
such
matters.
Since this paper was written, the Financial
Services and Marketing Bill has been amended.
The current version can be viewed at:
www.parliament.the-stationery-office.co.uk
FIT AND PROPER - A HISTORICAL
EXCURSUS
As long ago as the 16th Century Lord
Coke said:
'he is said in law to be fit to execute his
office, who has three things: honesty,
knowledge and ability; honesty to
execute it truly, without malice,
affection or partiality; knowledge to
know what he ought truly to do; and
ability, as well in estate as in body, that
he may intend and execute his office,
when need is, diligently, and not for
impotency or poverty neglected'.
In truth, these concepts are not able to be
improved upon in the presently proposed
legislation, the Financial Services and Mar-
kets Bill (the Bill).1
Journal of Financial Regulation
and Compliance, Vol. 8, No. 2,
2000, pp. 109-117
Henry Stewart Publications,
1358-1988
Page 109

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