The FCA has warned firms to get ready for new rules and guidance to help tackle non-financial misconduct (NFM), such as bullying or harassment in the workplace.
The new rules come into effect on 1 September.
The regulator said non-financial misconduct includes behaviour that is not of a clearly financial nature such as bullying, harassment and violence.
Where NFM is serious and goes unchecked, the FCA said it can harm individuals, firms and confidence in financial services.
A new rule coming into effect in September will extend the scope of the conduct rules in non-banking firms to cover bullying, harassment or violence against colleagues, where it relates to an individual’s role.
The new code of conduct (COCON) rule will apply where there is a sufficient work-related link. It will not apply retrospectively.
There is already a fit and proper test (FIT) rule which allows firms to consider any relevant misconduct, wherever it occurs, when assessing fitness and propriety.
The FCA said COCON and FIT will operate separately. The new COCON rule focuses on certain work-related misconduct, while new FIT guidance clarifies how firms can take a broader range of NFM into account when assessing fitness and propriety.
The FCA said before 1 September 2026, firms should review whether they need to update their approach to:
• Staff policies.
• Conduct breach reporting.
• Fit and proper assessments.
• Regulatory references.
Firms should also ensure staff and managers understand how the changes apply to them.
The regulator said firms do not need to:
• Carry out retrospective analysis to check whether they correctly determined past conduct rule breaches.
• Revise past fitness and propriety assessments.
• Monitor employees’ private lives or social media accounts.
• Investigate allegations about employees’ private lives if they are trivial, implausible or irrelevant.
• Do anything contrary to privacy, employment or other relevant law.
The FCA has published new Handbook guidance (PS25/23) to help firms apply COCON and FIT with clarity and confidence, reducing the need for external advice.
The guidance, covers: the boundary between work and private life; how NFM can breach the conduct rules; reasonable steps for managers; fitness and propriety assessments, including private life, social media and unproven allegations.
The new rules and guidance will come into effect on 1 September 2026.