The Financial Conduct Authority is extending its anti-bullying and anti-discrimination rules beyond the banking industry.
It means that serious harassment or bullying – also called “non-financial conduct” – would be a breach of the code of conduct for financial advisors or other similar roles.
It said that the FCA’s current rules on non-financial misbehavior will be extended to 37,000 firms regulated by 1 September 2026.
It was not clear before when such behaviours could be considered a breach of conduct rules in an organization other than a banking institution.
The proposed rule will require that serious and substantiated instances of poor personal behavior be included in regulatory references, making it more difficult for individuals to avoid the consequences when they move from one firm to another.
The FCA updated its draft guidance on how firms should take into account non-financial conduct when assessing whether someone is “fit and right” to work in the financial services industry.
Included are examples such as the use of social media by employees and “the relevance” of personal and private behavior.
Consultations on the draft guidelines are open until 10th September 2025.
A survey conducted by the FCA last year found that bullying and sexual harassment were the top three personal misconduct concerns reported in the UK’s financial sector.
Earlier this year the regulator announced that it would abandon plans to “name-and-shame” UK companies for nonfinancial misconduct. It said that this would only be done in “exceptional situations”.
The FCA also stated that it would not duplicate legal obligations already placed on employers, such as the Worker Protection Act which requires employers to protect their workers against third-party sexual harassment.
Sarah Pritchard said, “We see too many problems on the market when there are culture failures within firms.”
Unchallenged bullying and harassment is a red flag. A culture that allows this to happen can raise concerns about the firm’s risk management.
Our new rules will support the vast majority firms who want to do what is right to increase trust in the financial services.
Emma Cocker is a senior associate at the law firm Lawrence Stephens in the employment department. She said: “For far too long, there has been an unbalance between the FCA rules on non-financial conduct and what was actually said and done to address such behavior.
The FCA will have to share information about poor personal behavior as well as financial misconduct.
The new rules are designed to help identify cultural failures within firms. This will allow the regulator to better spot instances of poor risk management and decision-making, two vital qualities for this industry.
James Alleyn of Kingsley Napley’s financial services regulatory team said that it was “disappointing”, however, that the proposals are still under consultation.
It is disappointing, given the FCA’s public position on non-financial misbehavior, that they are undertaking a new consultation, have watered down their previous proposals, and still have not published detailed guidance.
Many in the regulated sector will be concerned about this, given that new rules will come into effect in 2026. It’s hard to believe that the regulator would put economic growth ahead of the need for regulatory clarity.
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