UK FCA's New Non-Financial Misconduct Rule Now In Force

The UK Financial Conduct Authority's new rule and guidance on serious non-financial misconduct (NFM) at non-banking firms became effective September 1, 2026. The change extends the scope of the Code of Conduct (COCON) to more explicitly cover misconduct such as harassment or other behavior that violates a person's dignity or creates a hostile environment, even if not linked to a protected characteristic under equality law.

This development is important for sophisticated counsel and clients because it aligns standards for non-banking firms with those already governing banks, signaling a heightened regulatory focus on workplace culture and individual accountability. The guidance also clarifies that serious NFM in an employee's private life may be relevant to their fitness and propriety (FIT) assessment if it undermines public confidence or shows a disregard for ethical obligations.

Affected firms under the Senior Managers and Certification Regime are now expected to review and update internal policies, training, and assessment processes to reflect the new framework. While the FCA states the rules are not retrospective, firms should ensure their compliance and HR functions can adequately address and document NFM incidents going forward.