Key facts
- The Financial Conduct Authority (FCA) is introducing new rules for approximately 37,000 non-bank firms in the City of London.
- The regulations address non-financial misconduct, defined as any unwanted behavior that makes a colleague feel unsafe, uncomfortable, or disrespected, or involves violence.
- The new rules take effect on Tuesday, September 1, 2026.
- Firms will be expected to demonstrate that they have taken reasonable steps to prepare, train staff, and update policies.
- The FCA's initial focus will be on supervision and testing firms' policy and governance arrangements rather than immediate enforcement.
City firms are set to face increased scrutiny over staff conduct as the Financial Conduct Authority (FCA) implements new rules targeting non-financial misconduct, including bullying and harassment. These regulations, effective September 1, 2026, apply to approximately 37,000 non-bank firms.
The FCA's definition of non-financial misconduct encompasses any unwanted behavior that creates an unsafe, uncomfortable, or disrespectful environment, or involves violence, extending beyond conduct linked to protected characteristics under the Equality Act 2010.
Lawyers anticipate that while the rules are not retrospective, the FCA will closely examine firms' preparedness from day one. This includes assessing whether firms have taken reasonable steps to train staff, update policies, and establish credible frameworks for identifying and addressing incidents. Experts advise a unified approach involving HR, legal, compliance, and senior management.
The FCA's immediate focus is expected to be on supervision, testing the practical application of firms' policies and governance. The scope of 'work-related' conduct is also broadened, potentially including behavior at firm social events or client dinners if linked to an individual's role, though firms are not expected to monitor private lives.