8. Factors relative to the assessment of the fitness, propriety or other qualifications of key shareholders include business repute and financial position, and whether such ownership would adversely affect the regulated entity.

9. It is recognised that in addition to the factors identified in the previous paragraphs, the assessment of fitness, propriety and other qualifications is a judgmental matter and that supervisors may have additional information at their disposal that they can consider on a case-by-case basis.

Issues arising from the emergence of financial conglomerates

10. Managers and directors in unregulated entities, usually those upstream from the regulated entities, in a financial conglomerate can exercise a material influence over many aspects of the regulated entities' business and can also play a key role in controlling risks in the various entities in the whole group.

11. This element raises issues of supervisory jurisdiction as supervisors' reach may not extend beyond their geographical boundaries, i.e. to other regulated entities in the group which are overseen by supervisors in other jurisdictions, and to unregulated entities in the group. Furthermore, measures taken to apply fitness, propriety or other qualification tests to unregulated entities in the group may create the false impression that supervision generally extends to those unregulated entities.

12. This also raises the issue of sharing of information among supervisors with respect to individuals and has implications with respect to the usual requirements of professional secrecy on supervisors. Most countries have legislation in place protecting the privacy of individuals and accordingly it is recognised that there may be limitations to a free exchange of information between supervisors.