The Financial Conduct Authority (FCA) has confirmed that serious incidents of bullying, harassment and violence in financial services firms will be treated as misconduct under regulatory rules, as part of a broader push to strengthen integrity and rebuild public trust in the sector.

The clarification marks a significant shift in the regulator’s expectations for workplace culture, particularly for firms outside the banking sector.

From 1 September 2026, the conduct rules that currently apply to banks will be extended to around 37,000 additional regulated firms, creating a consistent framework across financial services.

The move follows widespread backing for the proposals during the FCA’s consultation process. It will close a long-standing regulatory gap and ensure that serious personal misconduct – once inconsistently treated across the industry – is now clearly within the remit of the regulator’s conduct rules.

Importantly, substantiated instances of bullying and harassment will be included in regulatory references.

This brings non-financial misconduct in line with how financial wrongdoing is currently reported, making it more difficult for individuals to avoid accountability by moving between firms.

CULTURAL CHANGE

Sarah Pritchard, the FCA’s deputy chief executive, said the reforms were vital to ensuring cultural change within firms.

“Too often when we see problems in the market, there are cultural failings in firms,” she said. “Behaviour like bullying or harassment going unchallenged is one of the reddest flags – a culture where this occurs can raise questions about a firm’s decision making and risk management.

“Our new rules will help drive consistency across industry and support the vast majority of firms that want to do the right thing to deepen trust in financial services.”

In parallel, the regulator has published updated draft guidance on how firms should factor non-financial misconduct into fitness and propriety assessments.

The guidance addresses issues such as the use of social media and the relevance of behaviour in an individual’s personal life, although the FCA has made clear that it does not intend to duplicate existing legal obligations under the Equality Act or the recent statutory duty to prevent workplace sexual harassment.

The regulator has already chosen not to proceed with aspects of previous draft guidance it deems unnecessary to meet its objectives. It is now consulting on the revised proposals, and will only proceed with implementation if there is clear support.

The consultation on the draft guidance is open until 10 September 2025.