Fit & Proper Assessment: BaFin Requirements Explained Simply

Anyone taking on leadership responsibility in the financial sector must be "fit and proper" — professionally qualified and personally reliable. BaFin checks this when appointing managing directors, supervisory board members, and key function holders.

But what exactly is reviewed? And how can companies prepare for the process?

What does Fit & Proper mean?

The concept comes from the European supervisory guidelines (EBA/ESMA Guidelines) and is divided into two areas:

• Fit (Professional suitability): Sufficient theoretical and practical knowledge for the respective role. BaFin expects relevant professional experience, industry knowledge, and verifiable qualifications.

• Proper (Personal reliability): No criminal convictions, no ongoing investigations, no insolvency proceedings, no sanctions listings. BaFin also reviews conflicts of interest and availability of time.

Who must be assessed?

The Fit & Proper requirements apply to:

• Managing directors and executive boards of credit institutions

• Members of supervisory boards and administrative boards

• Key Function Holders

• Holders of significant shareholdings

Even in the event of personnel changes (new appointment, change of role), suitability must be proven again.

Common pitfalls

Many companies underestimate the effort involved in the Fit & Proper assessment:

1. Incomplete documentation: BaFin expects complete evidence — missing documents delay the process significantly

2. No preliminary check: If problems are only discovered during the BaFin procedure, time becomes an issue

3. One-time event: Fit & Proper is not a one-off matter — ongoing monitoring obligations are often overlooked

How Indicium speeds up the process

Indicium automates the preliminary check for Fit & Proper:

• Reliability screening: Automatic checks against sanctions lists, PEP databases, insolvency registers, and adverse media

• Qualification verification: Review of educational credentials and professional background

• BaFin-ready reports: Structured documentation that can be used directly for the notification process

• Ongoing monitoring: Automatic alerts when the risk profile changes

The result: you identify potential issues before the BaFin procedure — not during it.

Read more — related articles

• BaFin Fit and Proper 2026

• Fit and Proper KWG § 25c

• DORA Art. 28 Third-Party Providers

• Sanctions List Screening for Companies

• EU UN OFAC Sanctions Lists