From 1 September 2026, the Financial Conduct Authority (FCA) will expand its rules on non-financial misconduct (NFM). Serious bullying, harassment and violence linked to work can fall under the FCA’s Code of Conduct (COCON). The change aims to improve accountability and workplace culture. But for UK financial firms, it also raises a practical question: will the new rules create real culture change, or simply add another layer of compliance?
What Is Non-Financial Misconduct?
Non-financial misconduct covers serious behaviour that is not directly related to financial activity. The FCA includes bullying, harassment and violence among the key areas covered by its new guidance.
This is important because workplace behaviour can affect more than individual employees. If serious misconduct is ignored, it can damage employee confidence, staff retention, business reputation and trust in financial services.
The FCA is therefore making it clearer that certain workplace behaviour can have regulatory consequences, not just internal HR consequences.
What Changes From 1 September 2026?
The main change is a new COCON rule, COCON 1.1.7FR. It extends the conduct rules in non-banking firms to cover serious bullying, harassment and violence against colleagues where there is a sufficient connection to the person's work.
The rule is not designed to turn every workplace disagreement into an FCA matter. The misconduct must meet the relevant conditions and be serious enough to fall within the rule. The FCA will consider factors such as:
Whether the behaviour is repeated or part of a pattern
How long it continued
The impact on the person affected
The seniority of the person involved
Any difference in power or influence between the people involved
Other relevant circumstances
This means firms will need to use judgement rather than apply the rules automatically to every complaint.
COCON vs FIT: Why Does It Matter?
Two parts of the FCA framework are particularly relevant: COCON and FIT. They deal with NFM in different ways.
COCON focuses on conduct
COCON sets conduct rules for people working in firms covered by the relevant regulatory framework. From September 2026, serious work-related bullying, harassment and violence can fall within these rules in non-banking firms.
FIT focuses on fitness and propriety
FIT is used when firms assess whether an individual is fit and proper to perform their role. The FCA's guidance makes clear that relevant misconduct can be considered under FIT even when it happens outside work. This does not mean firms must monitor employees' private lives. Instead, private conduct may matter when it raises a serious concern about a person's suitability for a regulated role.
Understanding this difference will be important for compliance, HR and senior management teams.
Why Is the FCA Expanding NFM Rules?
The FCA wants firms to set clearer standards and take action when serious misconduct occurs. It also wants firms to build healthier and more inclusive workplace cultures and strengthen trust in financial services. The move has received strong support from industry. In its consultation, 95% of respondents agreed that additional Handbook guidance would provide clear benefits.
However, regulation alone cannot create a healthy workplace. A company can have detailed policies and still have a poor culture if managers ignore complaints or employees are afraid to speak up.
This is where the real test begins.
What Does This Mean for UK Financial Firms?
The September 2026 deadline gives firms time to review their existing processes.
The FCA recommends that affected firms consider whether they need to update:
Staff policies
Conduct breach reporting
Fit and proper assessments
Regulatory references
Training for staff and managers
Firms should also make sure employees understand what the new rules mean for them.
This does not necessarily mean creating an entirely new compliance system. In many cases, the better approach may be to review existing HR, compliance and governance processes and identify where the gaps are.
Will the New Rules Create More Compliance Work?
Yes, there will be some additional work. Firms may need to review policies, improve reporting processes and make sure relevant teams understand when NFM could become a regulatory matter. But the FCA has also set clear limits on what firms are expected to do. They do not need to:
Revisit every past conduct decision
Repeat previous fitness and propriety assessments
Monitor employees' private lives or social media accounts
Investigate trivial, implausible or irrelevant allegations
Take action that conflicts with privacy or employment law
These limits are important. They can help firms avoid turning the new rules into a broad and costly monitoring exercise.
Culture Change or Compliance Burden?
The difference will come down to implementation.
If firms treat the new rules as a box-ticking exercise, they may add paperwork without changing behaviour. If they use the rules to improve accountability, reporting and leadership standards, the changes could support lasting culture change.
Conclusion
The FCA's NFM expansion is more than a new compliance deadline. From 1 September 2026, serious work-related bullying, harassment and violence can have regulatory consequences under COCON, while updated FIT guidance gives firms a clearer framework for assessing misconduct.
The real question is not whether firms can meet the rules. It is whether they can use them to build stronger accountability and better workplace cultures without creating unnecessary compliance burdens.
