CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS
Kiran Fintax IFSC Pvt Ltd is authorised by IFSCA for tax advisory services. Its director discovers that a person associated with the firm has been convicted of fraud involving moral turpitude. Which statement best describes the regulatory consequence under the fit and proper principle?
IFSCA may regard the firm as not meeting fit and proper criteria and may refuse, suspend or cancel its authorisation after due process. Integrity of promoters and key persons is central to authorisation, so a fraud conviction of an associate is relevant and cannot be ignored.
- ANothing changes because conviction of an associate is irrelevant
- BIFSCA may treat the firm as failing fit and proper criteria, and may take action including refusal, suspension or cancellation of authorisationCorrect
- COnly the associate's personal tax return is affected
- DAuthorisation automatically converts to a restricted licence
Explanation
IFSCA's authorisation regimes require applicants and key persons to be fit and proper. A conviction involving fraud or moral turpitude weighs against that status, so IFSCA can act against the authorisation after due process. It is not irrelevant, and there is no automatic conversion to a restricted licence.
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