The Fit and Proper Test: How to Prepare Key Persons for Regulatory Vetting

Every gambling licence application includes an assessment of the people behind the business. Regulators call it the fit and proper test, and it applies to directors, significant shareholders, ultimate beneficial owners and holders of key functions such as compliance, AML and finance. Failures here delay or sink applications more often than any business issue. Here is what is assessed and how to prepare.

Who is vetted

The scope varies but typically includes all board members, shareholders above a threshold (commonly 10% but sometimes lower), beneficial owners through any holding structure, and named key persons. Some regulators, notably the UK, require personal licences for senior managers; Malta requires key function holders to be approved individually; Poland requires vetting of board and supervisory board members and shareholders.

What is assessed

Three dimensions recur. Integrity covers criminal records, regulatory sanctions, involvement in insolvent companies, litigation and, increasingly, past involvement in unlicensed gambling. Financial standing covers personal solvency, bankruptcies and tax compliance. Competence covers relevant experience and qualifications for the role, particularly for compliance and AML functions where regulators expect demonstrable expertise.

Source of wealth and funds

Shareholders must document where their wealth comes from and where the funds invested in the applicant originated. Regulators expect bank statements, sale agreements, tax returns or audited accounts, not narrative explanations. Wealth from jurisdictions with weak AML frameworks or from cash businesses attracts more questions.

Disclosure

The cardinal rule is full disclosure. Regulators conduct independent checks, and an undisclosed issue found in those checks is far more damaging than the issue itself. Old convictions, dismissed proceedings and foreign matters should all be declared with explanation. Most regulators state that non-disclosure alone can be grounds for refusal.

Preparing the personal declaration

Each person should compile a complete personal history: employment, directorships, shareholdings, residences, legal proceedings and regulatory interactions. Certified identity documents, police clearances from every country of residence, credit reports and professional references are commonly required. Prepare these before filing, since obtaining foreign police certificates alone can take months.

Ongoing obligations

Fit and proper is not a one-time test. Changes in shareholding, appointments of new directors or key persons, and material events affecting existing persons must be notified, and regulators can reassess at any time. Building an internal process to track and notify changes protects the licence.

Our licensing practice prepares key persons and shareholders for vetting across jurisdictions and manages personal licence applications.