The FCA published its final guidance on non-financial misconduct (NFM) in December 2025. It takes account of feedback received as a result of a consultation on draft guidance which took place over the summer of 2025, with 95% of respondents wanting additional guidance on non-financial misconduct.
The guidance is relevant to all FCA and PRA authorised firms and to all employees and individuals who are subject to the FCA Code of Conduct (COCON), as well as those who have to satisfy the 'fit and proper' test (see below).
Background
In July 2025 the FCA announced it was amending COCON to create alignment between banks and non-banks, with the result that bullying, harassment and violence fall to be considered as non-financial misconduct in non-banks whether or not the conduct forms part of the non-bank's financial services activities. Currently such matters are only relevant in non-banks if the conduct forms part of the non-bank's financial services activities, which means it is harder to establish at non-banks that incidents of NFM are sufficiently linked to financial services activities to constitute a breach of COCON. Alongside the change to COCON, the FCA consulted on additional guidance in COCON and its Fit and Proper test for Employees and Senior Personnel (FIT).
Overview of guidance
Strengthening guidance around NFM is meant to enable a speak up culture, give clarity to internal investigators and decision-makers, as well as increase confidence in the sector from a consumer perspective (on the basis that better cultures lead to better commercial decision-making).
The guidance clarifies at the outset that, "Our framework does not duplicate existing legal obligations on firms, nor serve as a substitute for the criminal law or firms' internal disciplinary processes". It also emphasises that guidance cannot cater for every situation and should not take the place of firms' making their own assessment of whether something crosses the threshold for NFM, particularly when it comes to evaluating seriousness.
The guidance comes into effect on 1 September 2026 (the same day that the change to COCON applies) and does not have retrospective effect. Conduct before that date should be handled by firms in line with the relevant version of the Handbook in force at the time.
Below, we have picked up on some key points which were added to the guidance following the consultation referred to above.
Alignment with employment law
Following feedback, the FCA has sought to dispel the idea that it is seeking to create a different or competing definition of what constitutes harassment (as set out in the Equality Act 2010). It has amended the guidance to make clear that, as within employment law, purpose and effect are both important when it comes to assessing whether harassment and bullying have taken place. Also, it makes clear that not all types of discrimination and victimisation are within the remit of the guidance. Neither will an individual manager be accountable for NFM beyond the limits of their knowledge and authority.
The distinction between work and private life
The guidance states that "private or personal life is entirely out of scope of our power to make and enforce conduct rules for individuals" but goes on to give examples of grey areas where there may be a blurring of boundaries. In cases where there is a close connection with work duties, such as at a training event, an award ceremony, or event organised by a client, there will be a sufficiently close connection for the conduct to be relevant NFM.
The fit and proper test
For staff who must meet the fit and proper test (those in senior manager functions, non-executive directors and certification staff such as anti-money laundering officers), conduct in and outside work may be relevant to fitness and propriety. When asked to define what is a good reason to look into a person's private life, the FCA has clarified that there is not a duty to investigate trivial or implausible matters. Rather, investigators should look for a material risk that the conduct will affect regulatory standards or requirements. Key factors might be is there a risk of repetition? Could the reputation of the firm suffer and/or consumer confidence be affected?
For those subject to FIT, certain matters in a person's private life, such as insolvency or fraud, must always be disclosed to the firm, as before. The guidance clarifies that senior manager conduct rule staff may be required to disclose information about their private or personal life to the FCA under senior manager conduct rule 4 in COCON if it would be material to an assessment of their fitness and propriety.
What is serious misconduct?
The guidance states that "no guidance can be exhaustive" and indicates that the seriousness threshold for harassment is to be aligned with the threshold for harassment in the Equality Act 2010. This means that regard should be had to the statutory definition and current case law when assessing whether someone's dignity may have been violated. As indicated above, the intention of the harasser is not the only relevant consideration; the effect on the individual may be just as important. Previous references, in the draft guidance, to the "specific characteristics or vulnerabilities" of the victim, have been removed. This is to avoid setting up a rival definition of how harassment is to be understood.
What about social media?
One of the things for which respondents sought clarity was, the extent to which a person's social media activity outside work must be monitored. The guidance confirms that firms do not need to actively monitor a person's social media accounts: "We do not seek to restrict individuals' legal rights of expression", and "Nothing in our guidance would prevent a firm from taking appropriate disciplinary action for breaches of its internal social media policies". In other words, if in the normal course it emerges that someone's social media activities might give rise to action under normal employment law standards for the role, this might be relevant to NFM.
The flowchart at Appendix 1 of the Guidance should be referred to for further details of how the NFM provisions may be engaged.
