CDC code in force: 1 August 2022
We must be satisfied about the honesty, integrity and financial soundness of everyone being assessed. We will not be satisfied that an individual is fit and proper if they:
- are subject to a bankruptcy order, bankruptcy restrictions order (including an interim order) or an award of sequestration
- are disqualified from acting as a director due to improper conduct
- are prohibited or disqualified from acting as a trustee (in any capacity)
- have an unspent criminal conviction related to dishonesty, fraud or financial crimeHN1
Mitigations – financial matters
If an individual has been, or is likely to be, subject to bankruptcy, a county court judgment (CCJ) or individual voluntary arrangement (IVA), including where a bankruptcy order has been applied for or a bankruptcy petition has been served, we are more likely to be satisfied if:
- the individual was discharged from bankruptcy, the CCJ or IVA more than five years before the authorisation application
- there is no pattern of bankruptcy, CCJs or IVAs
- the CCJs do not indicate a persistent failure to settle outstanding debts
Mitigations – business matters
If an individual was a director or partner of, or concerned in the management of, a business that went into insolvency, liquidation or administration either at the time of the insolvency event or during the 12 months before it occurred, we are more likely to be satisfied if:
- they can show that their action or inaction was not significantly responsible for the failing of that business
- there was only one such failure
- the event occurred more than five years before the application for authorisation
Mitigations – criminal matters
If an individual has an unspent criminal conviction which is not related to dishonesty, fraud or financial crime, we are more likely to be satisfied if:
- the conviction relates to a minor offence, depending on the circumstances of the offence and any mitigating factors
- there has only been one conviction
- the conviction is not relevant to the role being undertaken in the CDC scheme
Mitigations – judgments and settlements
If an individual has been the subject of any adverse judgments or settlements in civil proceedings, particularly in connection with investment or other financial business, misconduct, fraud or the formation or management of a corporate body, we are more likely to be satisfied if:
- there is no pattern of recurrent proceedings or settlements for breach of contract, or failure to fulfil obligations or duties
- the individual being assessed did not have a significant role in the events that led to proceedings being brought
- the impact of their action or inaction on other individuals or organisations was relatively limited
- the proceedings related only to family or private matters
Legal reference
HN1 Paragraph 2 of Schedule 1 to the Regulations