The Financial Conduct Authority (FCA) is expanding how it will treat non-financial misconduct within FCA authorised firms. 

The changes to the FCA’s Code of Conduct (COCON) rules will come into force on 1 September 2026 and will have a significant impact on how regulated firms across the financial services sector dealing with internal HR issues.

For many years, non-financial misconduct issues such as bullying, harassment and serious workplace misconduct sat between issues of employment law and financial regulation. While these behaviours were clearly matters for employers to deal with, it was not always clear when they became a regulatory issue and individuals were often free to move from firm to firm regardless of such behaviours.

The new rules and accompanying guidance therefore clarifies how firms should deal with work-related non-financial misconduct going forward and when assessing whether an individual is a fit and proper person to work in financial services. 

The FCA guidance confirms that conduct may be considered “work-related” where it takes place:

• In the workplace;
• During working hours;
• At work social events, industry events or training courses;
• Through work-related social media activity; or
• Where a person’s role, authority or seniority contributed to the behaviour.

Only serious misconduct is likely to fall within scope. When assessing seriousness, firms should consider:

• The nature, frequency and duration of the behaviour;
• The impact on the individual affected;
• The seniority of the person involved;
• Whether the conduct was intentional; and
• Whether it formed part of a wider pattern of behaviour.

Where such non-financial misconduct results in disciplinary action, firms may also need to notify the FCA and consider whether findings should be included within future regulatory references.

The changes will apply to all FCA authorised firms and individuals subject to the Senior Managers and Certification Regime, meaning the new rules will apply to non-bank firms including investment firms, asset and fund managers and insurers. 

 With September 2026 fast approaching, firms should now begin preparing by:

• Reviewing workplace conduct, disciplinary and whistleblowing policies;
• Updating investigation procedures;
• Training managers and HR teams;
• Improving documentation and decision-making records; and
• Reviewing regulatory reference processes.

FMGS are available to assist firms reviewing workplace policies, disciplinary procedures and regulatory compliance frameworks in preparation for the September 2026 changes.

This article is for information purposes only and is not intended to amount to legal advice to any person on a specific case or matter.