What do you need to know about the new rules from the FCA on non-financial misconduct?
The FCA has announced that starting on September 1st, 2026, non-financial misconduct, such as bullying, violence or harassment, will become a Conduct Rule breach for 37,000 additional financial services firms. Banks have already had to abide by this, but now smaller organizations and FSI firms of all stripes will need to as well.
What is Non-Financial Misconduct?
Non-financial misconduct can include conduct deemed inappropriate in personal life, or on social media as well. According to the FCA, if the behavior can be deemed as a violation if it attacks the dignity of an individual, it has the effect of creating an intimidating, hostile, degrading, humiliating or offensive environment, or involves violence towards an individual.
Who does it apply to?
The new rule is designed to mainly combat poor behavior between colleagues, which extends to employee groups in companies and contractors. The FCA is clear, however, that it is not limited to those working together. In fact, misconduct towards clients and business contacts would also be considered a violation of the rules.
Organizations will have to disclose any serious and substantiated personal misconduct in regulatory references. This is part of a larger effort from the FCA to promote healthy cultures in the workplace and improve accountability amidst leadership of companies in the industry.
What are three things you can do to ensure FCA compliance?
- Know Everything: Make sure you know what’s going on. All business communication that happens – internally and externally – should be recorded, stored, and auditable in the case of any accusations of non-financial misconduct should happen.
- Create A Plan: Ensure you have a system in place to prevent as many of these situations as possible, and to report when these situations do occur. Organizations that take this seriously, by monitoring communication and promptly reporting any such violations, will have a better chance of avoiding serious wrongdoing in the eyes of the FCA.
- Use Available Technology: Emails, Microsoft Teams messages, WhatsApp, texts, phone calls – any conduit of communication by which business happens will need to be monitored and easily retrieved. AI solutions such as MultiLine by Movius, which allows bankers to place a secure and compliant business number on any mobile device for client communication, can analyze these conversations in real time for signs of rule violations and alert company leadership. IT administration will also have voice, SMS and social messaging conversation captured for auditing and internal organization.