FCA's Non-Financial Misconduct (NFM) Rules
The FCA has made it clear that culture is now a regulatory issue, not just an HR concern. From 1 September 2026, serious bullying, harassment, sexual misconduct and other forms of Non-Financial Misconduct (NFM) will fall within the FCA's Conduct Rules, placing greater responsibility on regulated firms to identify, investigate and respond to harmful behaviour. Organisations must now be able to evidence that they have effective processes, reporting mechanisms and governance in place to prevent misconduct, protect employees and demonstrate compliance with the FCA's evolving expectations.
Key changes: Extension to non-bank firms
The FCA has extended the scope of the Conduct Rules to a significantly wider range of regulated firms beyond the banking sector. Serious misconduct between individuals subject to the Conduct Rules may now fall within scope where it occurs in a work-related context or is connected to the performance of regulated activities. This brings workplace behaviour more directly into the regulatory perimeter for affected firms, alongside existing employment law and HR frameworks.
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Key changes: The boundary between work and private life
The FCA draws an important distinction between conduct that is work-related and conduct that takes place in an individual’s private life.
Under the Code of Conduct (COCON), the rules apply to workplace and work-connected environments, including client events, conferences, training sessions and work social occasions.
However, the FCA's Fit and Proper (FIT) assessment is broader. Serious behaviour outside of work, including violence, sexual misconduct or dishonesty, may still be relevant where it raises concerns about an individual’s suitability to perform a regulated role.
Key changes: Manager accountability
The FCA's changes place greater focus on the responsibilities of senior leaders and managers under the Senior Managers & Certification Regime (SM&CR). Workplace culture and the handling of misconduct are increasingly being considered within broader governance and conduct expectations.
Senior Managers, board members and people managers are expected to take reasonable steps to identify, escalate and respond appropriately to harmful behaviour within their areas of responsibility. This includes maintaining oversight of culture-related risks, ensuring concerns are handled appropriately, and supporting environments where employees feel able to speak up. The handling of serious misconduct may also be relevant when assessing an individual's conduct, fitness and accountability under the FCA's regulatory framework.
How firms can prepare
Firms should review whether their existing policies, processes and governance arrangements are equipped to respond to the FCA's updated expectations around Non-Financial Misconduct. Key areas to consider include:
Reviewing policies, disciplinary procedures and conduct frameworks to ensure they reflect the expanded scope of the rules
Assessing whether reporting channels and investigation processes are accessible, trusted and appropriately governed
Considering how Non-Financial Misconduct is reflected within existing risk management and governance structures
Ensuring boards, senior leaders and managers understand their responsibilities and are equipped to respond appropriately to concerns raised
Delivering training that helps employees recognise, report and respond to harmful behaviour in work-related settings
Resources & toolkits
Practical guidance, templates, and support materials designed to help you improve reporting culture, strengthen processes, and meet evolving compliance expectations. Explore the full library here.
FCA Non-Financial Misconduct Compliance Checklist
The FCA’s Non-Financial Misconduct rules will bring serious bullying, harassment, sexual misconduct and other inappropriate behaviour into the scope of regulatory misconduct. This checklist helps FCA-regulated firms understand the requirements, identify immediate actions, reduce conduct and reputational risk, and prepare HR, compliance and leadership teams for implementation.
Sexual Harassment & Speak-Up Compliance Toolkit
The Employment Rights Act raises the bar from "reasonable steps" to "all reasonable steps" to prevent sexual harassment, extending liability to third-party conduct and strengthening whistleblowing protections. This toolkit helps you identify organisational exposure, take required action, and evidence compliance in practice.
Manage Non-Financial Misconduct with confidence
Report + Support™ gives you the infrastructure to identify risks early, capture concerns safely, manage cases consistently, and generate clear audit trails - so you can demonstrate compliance, not just claim it.
Name Matching
Automatically detect when the same individual appears across multiple reports. This helps identify repeat behaviours earlier and gives HR and compliance teams the evidence needed to take appropriate, informed action.
Hotspot Analysis
Quickly see where incidents are occurring most often across your firm. Identify higher-risk teams, locations, or environments so you can focus preventative action where it will have the greatest impact.
Behaviour Insights
Track patterns in bullying, harassment, discrimination, and other forms of misconduct. Understand how behaviours evolve over time and use the insight to inform culture initiatives and prevention strategies.
Your partner for compliance and culture change
Regulators won't just ask what you have in place, they'll ask what you've done. Book a demo to see how Report + Support™ helps you evidence compliance, reduce legal exposure, and build a workplace where issues are prevented, not just managed.
