What are the FCA's rules on non-financial misconduct?
Since 1 September 2026, the FCA's Code of Conduct (COCON) has applied to serious bullying, harassment and violence by conduct rules staff towards colleagues in firms other than banks, as it already did in banks. New FCA guidance explains when such behaviour breaches the conduct rules and how it bears on fitness and propriety.
What the new rule covers
The FCA describes non-financial misconduct (NFM) as behaviour that is not clearly financial in nature, such as bullying, harassment and violence. The new rule, COCON 1.1.7FR, applies to firms under the Senior Managers and Certification Regime other than SMCR banking firms, where the conduct rules already had wider scope. It extends COCON to unwanted conduct by conduct rules staff that has the purpose or effect of violating a colleague's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them, and to conduct that is violent.
The people protected include the firm's employees and those of its group, people who perform its functions, and people who provide services to it. The FCA says the rule applies where there is a sufficient work-related link and does not apply retrospectively.
When it breaches the conduct rules
FCA guidance in COCON 4.3 says the rule only covers conduct that is serious. Behaviour breaches Individual Conduct Rule 1 if it shows a lack of integrity, or Rule 2 if it shows a failure to act with due skill, care and diligence.
- Whether the conduct is repeated or part of a pattern, and how long it lasted
- The size of the impact on the person affected
- The seniority of the person responsible, and any power they have over the other person's career
- A single incident can be enough, and physical violence is covered as well as words and messages
What firms should and need not do
The FCA says firms should have considered whether to update staff policies, conduct breach reporting, fit and proper assessments and regulatory references, and make sure staff and managers understand the changes.
It also says firms do not need to re-examine past conduct breach decisions or past fitness and propriety assessments, monitor employees' private lives or social media, investigate trivial, implausible or irrelevant allegations about private lives, or do anything contrary to privacy, employment or other law. A fair investigation and disciplinary process under the Acas Code still applies.
Sources
- Non-financial misconduct in financial services · FCA
- PS25/23: Tackling non-financial misconduct in financial services · FCA
- FCA confirms final guidance to tackle serious non-financial misconduct in financial services · FCA
- COCON 1.1 Application · FCA Handbook
- COCON 4.3 Specific guidance on harassment · FCA Handbook
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
- COCON 1.1.7FR and the FCA's NFM guidance came into force
Future dates are expected dates and depend on Parliament.
What employers can do
- Confirm which staff are conduct rules staff and brief them on the new rule
- Update bullying, harassment and violence policies to refer to the conduct rules
- Add NFM to your conduct breach assessment and reporting process
- Train managers to recognise and escalate serious allegations
- Review how NFM findings feed into fitness and propriety and regulatory references
- Keep investigations fair, documented and consistent with employment and privacy law
Pre-employment checks by sector: Financial services.
Related answers
- Can misconduct outside work affect whether someone is fit and proper under FCA rules? Yes. FCA guidance says conduct in someone's private life can be relevant to their fitness and propriety, especially dishonesty, a lack of integrity, violence or sexual misconduct. Firms need not monitor staff's private lives or social media. They need only look into private life where there is a good reason, such as an allegation that would call someone's fitness into question if true.
- What does the duty to take all reasonable steps to prevent sexual harassment mean for employers? From 30 October 2026, employers in Great Britain must take all reasonable steps, not just reasonable steps, to prevent sexual harassment of their employees. The same date brings a new duty not to permit harassment of employees by third parties such as customers. What counts as reasonable depends on the employer's size, sector, working environment and resources.
- What is a fair disciplinary procedure? In Great Britain, a fair disciplinary procedure follows the Acas Code of Practice: investigate to establish the facts, tell the employee about the problem in writing, hold a meeting where they can respond, allow them to be accompanied, decide and confirm the outcome in writing, and offer an appeal.