FCA final policy and further consultation paper on tackling non-financial misconduct in financial services

On 2 July 2025, the FCA confirmed its final policy and published a further consultation paper (CP25/18) on tackling non-financial misconduct (NFM) in financial services.

The FCA is introducing a new rule that will amend the scope of the Code of Conduct (COCON) as it applies to non-banks. The rule, which applies from 1 September 2026, will bring more instances of NFM within its regulatory remit and will align the approach the FCA takes across all Senior Manager and Certification Regime (SMCR) firms.

The FCA is also seeking views on whether additional guidance in COCON and FIT is needed and, if so, on the form any such guidance should take. The draft guidance explains in more detail how NFM forms part of the fit and proper test in the Senior Personnel sourcebook (FIT), applying to SMCR firms. 

The consultation is open until 10 September 2025 and the FCA intends to set out its final regulatory approach before the end of the year.

While the FCA had been expected to publish final guidance by the end of June, it is clear that it is now building on the comments from the earlier consultation and seeking further feedback (the revised draft guidance is available in the Annex to the CP25/18 consultation).

We have taken soundings from some financial services clients, as part of a roundtable discussion, and their initial feedback is positive. Broadly, they felt that:

• additional guidance in COCON and FIT would be desirable
• more guidance is needed on the distinction between private life and work, and when a distinction should and should not be made.
• harassment in all its forms should be covered, not just related to a protected characteristic (i.e. bullying). Also, that it is right for it to be aligned to employment law definitions which take into account both subjective effect and objective assessment of the conduct.

We will be holding a further roundtable for FS clients in the autumn. If you would like to be invited to this, please email Helen Farr.