The Financial Conduct Authority will extend its rules governing bullying and discrimination beyond the banking sector.
This means that serious bullying or harassment – also known as “non-financial misconduct” would amount to a breach of conduct for financial advisers or similar roles.
From 1 September 2026, the current FCA rules around non-financial misconduct will extend to around 37,000 regulated firms, it said.
Previously, it had been unclear when these types of behaviours would amount to a conduct rules breach in a firm other than a bank.
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Under the proposed rules, serious and substantiated cases of poor personal behaviour will also have to be shared in regulatory references – making it harder for individuals to avoid consequences when moving from firm to firm.
The FCA has updated its draft guidance covering how firms should consider non-financial misconduct when assessing if someone is “fit and proper” to work in financial services.
This includes instances such as how employees use social media and “the relevance of behaviour in private and personal life”.
A consultation on the draft guidance is open until 10 September 2025.
Last year, a survey by the FCA found that bullying, sexual harassment and discrimination were the most commonly recorded personal misconduct concerns in the UK financial sector.
However, earlier this year, the regulator said that plans to “name and shame” UK firms over non-financial misconduct would be scrapped. This would only happen in “exceptional circumstances”, it said.
The FCA has also indicated that it will not duplicate existing legal obligations on employers in the sector, such as the Worker Protection Act, which places a legal duty on employers to ensure they protect workers from third-party sexual harassment.
Sarah Pritchard, FCA deputy chief executive, said: “Too often when we see problems in the market, there are cultural failings in firms.
“Behaviour like bullying or harassment going unchallenged is one of the reddest flags – a culture where this occurs can raise questions about a firm’s decision making and risk management.
“Our new rules will help drive consistency across industry and support the vast majority of firms that want to do the right thing to deepen trust in financial services.”
Emma Cocker, senior associate in the employment team at law firm Lawrence Stephens, said: “For too long there has been a mismatch between what the FCA’s rules say about non-financial misconduct and what has actually been said and done about such behaviour.
“Under these new guidelines, poor personal behaviour will be treated in the same way as financial misconduct, meaning it will need to be shared in regulatory references to the FCA.
“In addition to the implications on individuals, the new rules will help the regulator to spot cultural failings in firms, which in turn helps to identify instances of poor decision making and risk management, both of which are vitally important qualities in this industry.”
However, James Alleyn, partner in the financial services regulatory team at Kingsley Napley, said it was “disappointing” that the proposals remain under consultation.
“Given the FCA’s bold public stance on non-financial misconduct before now, it is disappointing that it is undertaking yet another consultation, has watered down its previous proposals and is still yet to publish detailed guidance.
“Given that new rules are coming in from 2026, this will be of concern for many in the regulated community. It is hard to conclude that this is anything other than the regulator putting economic growth before the need for regulatory certainty.”
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