New FCA reporting requirements for finance industry to tackle non-financial misconduct such as bullying and harassment
In a bid to tackle bullying and sexual harassment in the financial industry, the FCA announced in July 2025 that new reporting requirements will be coming into force to tackle instances of non-financial misconduct.
From 1 September 2026 all incidents of ‘serious, unsubstantiated poor personal behaviour’ such as bullying and sexual harassment – including misconduct that happens outside of work, will need to be reported to the FCA using the same process that currently applies to reporting financial misconduct.
The changes will require more companies operating in the financial sector to monitor and report poor behaviour. Previously the requirements applied only to Banks but will now extend to over 37,000 regulated firms, including hedge funds, insurers and pension companies, clarifying the expectations around poor behaviour and increasing consistency across the sector.
The FCA expects firms to improve their reporting mechanisms and formal processes to mitigate risks of all kinds to help create a healthier culture across the industry. The regulation places new expectations on regulated firms to be taking all types of non-financial misconduct seriously through ‘appropriate internal procedures.’
Firms with inadequate systems and controls in place could be subject to investigation, with the FCA vowing to act against firms who do not have robust systems, processes and controls in place.
FCA Non-Financial misconduct resources:
- Visit our FCA Non-Financial Misconduct Compliance Hub
- Download our ‘FCA Non-Financial Misconduct Compliance Checklist’
- Download our ‘Complete Guide to Navigating the FCA Non-Financial Misconduct Rules’
Why are the requirements being brought in?
The financial sector has been long criticised for its toxic work culture, from long gruelling hours, persistent cases of bullying, sexual harassment and discrimination hitting the headlines and more recently the deaths of three young investment bankers prompting concerns about mental health and inhumane working conditions.
A 2024 FCA survey found that bullying, harassment and discrimination were the most frequently reported forms of non-financial misconduct in financial services, with allegations increasing over the last three years.
The survey found that 50% of firms identified incidents through formal processes or whistleblowing channels, highlighting the need for additional reporting channels to encourage reporting and increase transparency on non-financial misconduct.
It also highlighted low resolution rates in the sector with only 43% of cases resulting in disciplinary action or another outcome. We know that when issues aren’t investigated fully or taken seriously, reporting numbers are often low as it discourages employees to speak up.
The FCA’s consultation paper makes it clear that regulators have an important role to play in tackling toxic behaviour such as bullying and harassment, acknowledging that cultural failure within firms prevents people from speaking up and undermines business performance.
The hope is that the new regulations will prevent people with a track record of poor behaviour from continuously moving between firms and improve the wider culture across the sector.
What do the new non-financial misconduct reporting requirements mean for you?
Review your speak-up channels to align with new regulatory expectations
The FCA have made it clear – firms must have robust systems in place to handle reports of bullying, harassment and other types of misconduct. Given the power dynamics in the sector, traditional reporting lines where junior members of staff report incidents to more senior team members may not be fit for purpose. Anonymous reporting platforms, like the one provided by Culture Shift provide a more appropriate, safer alternative to reporting that bypasses the need for direct conversation with managers. An anonymous reporting system can be a more appropriate tool to help break down the barriers to speaking up.
Amend handbooks and policies
Staff handbooks, policies and processes should be reviewed and brought in-line with the new regulatory expectations, clearly setting out what types of behaviour is acceptable and how your organisation will investigate Conduct Rule breaches. This should include providing assessment criteria and the regulatory reporting process.
Staff training on conduct expectations under the new regulations
All staff should be made aware of the new conduct expectations and what it means for them, as well as being provided a copy of the new policies and procedures. Training should be provided to line managers to enable them to recognise and handle instances of non-financial misconduct and fully understand their duties when it comes to reporting a breach of conduct.
How can Culture Shift support financial services firms to comply with the new non-financial misconduct regulations?
The new non-financial misconduct regulations mark a significant and important shift in how misconduct is handled across the financial services sector. Risk & Compliance teams need to act now, not only to ensure compliance but to start driving cultural change across the sector.
Culture Shift is a full suite anonymous reporting software and resolution system which can empower organisations to tackle toxic workplace cultures and damaging behaviours. With the new FCA’s expectations for financial services firms to have robust systems and processes in place for misconduct reporting, our platform can help you create a safe space for employees to speak up, recognising and resolving issues promptly and complying with your new obligations under the non-financial misconduct regulations.
