FCA Finalizes Guidance on Non-Financial Misconduct
New guidance from the UK's Financial Conduct Authority effective September 1 clarifies that issues like bullying and harassment can breach its Conduct Rules, requiring firms to integrate regulatory assessments into HR investigations.
The UK's Financial Conduct Authority (FCA) has issued final guidance and an associated rule change clarifying how its framework applies to non-financial misconduct (NFM). Effective September 1, 2026, the new rules apply to all FCA-regulated firms and explicitly connect behaviors such as bullying, harassment, and discrimination to regulatory duties under the Conduct Rules and assessments of an individual's fitness and propriety.
For global financial services firms, the guidance means that what appears to be a standard employee relations issue may now carry significant UK regulatory weight. A complaint originating from a global reporting hotline or a US-based investigation could trigger mandatory, separate assessments under UK rules, even if the conduct occurred outside the office at a work-related event. An internal finding that a complaint is "unsubstantiated" for HR purposes may not resolve the regulatory question, as the FCA's fitness and propriety assessment follows a different standard.
Firms should immediately review their global investigation and reporting protocols to ensure any matter with a UK nexus is flagged early for specialized review by UK Legal, Compliance, and HR teams to manage the distinct employment and regulatory analyses required.