‘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,’ says deputy chief executive

The FCA has clarified changes to the rules around non-financial misconduct today (2 July 2025) with the publishing of a new consultation.

In the newly published document, the regulator specified that bullying and harassment in financial firms qualifies as misconduct. Previous rules were unclear on these types of behaviours and whether they would amount to a conduct breach at financial firms other than banks. 

New rules will expand the scope of the regulatory code of conduct in non-banks to match that in banks from 1 September 2026, allowing time for the FCA to finalise any accompanying guidance that it may publish before the rule comes into effect.

Guidance added that “serious” and “substantiated” cases of poor personal behaviour would also need to be shared via regulatory references in the same way as for financial misconduct.

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.”

A consultation on these new draft rules will be open for firms to provide feedback until 10 September 2025.

Clarify and strengthen

In March, the FCA announced that it would “prioritise work to tackle non-financial misconduct” when it confirmed it would not bring forward proposed regulatory work on improving diversity and inclusion at regulated firms.

Its most recent statement confirmed that it has also decided not to proceed with guidance on threshold conditions and the senior management arrangements, systems and controls (SYSC) sourcebooks. 

The FCA explained it “had already decided not to proceed with guidance which is not necessary to achieve its aims” and added that it was “also not seeking to duplicate existing legal obligations on firms under the Equality Act and the recent preventative duty to protect workers from sexual harassment”. 

This focus on non-financial misconduct, however, has been aimed clarifying the discrepancy between rules that apply to banks and non-banks. The latest consultation builds on original suggestions made around non-financial misconduct in a September 2023 paper and is now seeking comments on the proposed rule changes.