CBUAE Fitness and Propriety Regulationchapter by chapter

Introduction / Objective / Scope

The CBUAE sets minimum fitness and propriety standards for various financial roles, extending to outsourced functions and overriding conflicting regulations.

Article 2.1-2.3

Persons holding specified positions must obtain Central Bank authorisation and prove fitness and propriety, and Authorized Individuals and Material Risk Takers must continuously meet fit and proper criteria through the Fit and Proper Process.

Article 2.4

The Fit and Proper Process must assess individuals based on the specific roles they will hold, as suitability is not universally transferable.

Article 2.5-2.6

Applicants must not take part in decision-making or policy-making for a proposed Designated Function before Central Bank authorisation, and Authorised Individuals and Licensees must make full, accurate fit-and-proper disclosures to the Central Bank.

Article 3.1-3.7

The Central Bank may conduct its own fitness checks, request third-party information, impose authorisation conditions, and remove any person found not fit and proper at any time.

Article 4.1

Branches of foreign licensees must establish local governance structures, such as a Senior Management committee, to carry out Board responsibilities and implement local legal and regulatory requirements where group requirements conflict.

Article 4.2

Licensees must ensure all staff are suitable for their positions, and staff giving advice or recommendations to customers must be suitably qualified and competent, covering fitness and propriety requirements.

Article 4.3-4.4

Licensees must assess fitness and propriety of persons in assessable positions and report all outcomes to the Central Bank, including board suitability and senior management competence.

Article 4.5-4.7

Licensees must not submit authorisation applications until assured the applicant is fit and proper, and must submit fitness results to the Central Bank 60 business days before appointment.

Article 4.8-4.9

Licensees must obtain Central Bank authorisation before reappointing or renewing any Authorised Individual's contract, including amending contract tenure, and must not publicly announce proposed appointments beforehand.

Article 4.10

Licensees must remove any Authorized Individual found not fit and proper from the Designated Function and replace them within the legally specified period, or within 90 days by default.

Article 4.11-4.12

Licensees must obtain Central Bank non-objection before terminating an Authorized Individual, plus Higher Shari'ah Authority non-objection for Shari'ah heads; urgent cases require immediate notification instead.

Article 5.1-5.2

Licensees must designate Material Risk Takers through a staff function assessment and must confirm each is fit, proper, suitable, and has required skills, knowledge and qualifications.

Article 6.1-6.2

The Fit and Proper Process must apply to all Applicants and Material Risk Takers, and the Central Bank may require any person engaged by a Licensee to undergo it.

Article 6.3

Licensees in a group must extend fit and proper processes to other group entities' senior managers with material influence and submit a Central Bank compliance plan meeting stricter requirements.

Article 6.4-6.5

Adverse fit and proper findings requiring removal need Central Bank non-objection, and Authorized Individuals and Material Risk Takers must be reassessed at least every three years.

Article 7.1(a)-(g)

Assessors must evaluate a person's fitness, propriety, and suitability based on their knowledge, ethics, experience, and conflict of interest management.

Article 8.1-8.2

The Board must collectively have the experience, skills and knowledge to oversee all Licensee activities and risks, set strategy, and encourage independent challenge, considering diversity in Board composition and selection.

Article 8.3-8.4

Licensees must submit an action plan to the Central Bank where Board Collective Suitability is deficient, which the Central Bank may weigh in future Board appointment approvals.

Article 9.1-9.4

Authorized individuals and material risk takers must maintain current competence, licensees must facilitate continuing professional development, with a default minimum of 10 hours per calendar year unless the Central Bank sets more specific requirements.

Article 9.5

Licensees must keep detailed continuing professional development records for Authorized Individuals and Material Risk Takers, including supporting certificates and receipts, and provide them to the Central Bank on request.

Article 10.1

Licensees must document fit and proper process results for all persons, keep that information confidential, and obtain the person's consent before sharing it unless UAE law requires disclosure.

Article 10.2

Fit and proper results for Authorized Individuals or Board collective suitability assessments must be submitted to the Central Bank immediately upon finalisation, with remediation plans reported where a person is found not fit and proper.

Article 10.3

A licensee must immediately notify the Central Bank in writing of information that may materially and adversely affect an Authorized Individual's fitness and propriety, with supporting documents.

Article 10.4

Licensees must notify the Central Bank in prescribed form of an Authorized Individual's resignation or retirement within five business days of notice, including effective date and resignation reasons, plus Higher Shari'ah Authority notice for ISSC heads.

Article 10.5-10.6

Licensees must conduct resignation exit interviews with Authorized Individuals, document the discussions, and provide related reports to the Central Bank as required.

Article 11.1-11.2

Licensees violating the Fitness and Propriety Regulation or Standards may face supervisory, administrative or financial sanctions, including removal of senior management, interim arrangements or sector bans.

Article 14.1-14.3

Persons already approved for designated functions are deemed authorised, while licensees had nine months to complete fit and proper assessments for unauthorised holders and material risk takers.