Non-Financial Misconduct: Are firms ready for the September 2026 deadline?

Since the FCA confirmed its final rules and guidance on non-financial misconduct (NFM) in December 2025, firms have been working to update their policies, internal processes and training to align with the regulator’s expectations ahead of the 1 September implementation deadline.

Yet a recent poll suggests that few firms are fully prepared. In this article, Nigel Sydenham, Director of Compliance Training highlights  the challenges that continue to cause uncertainty.

In our recent webinar presented by Nigel Sydenham and Peter Haines, attendees were asked “How prepared is your firm for the introduction of the new rule and guidance in September 2026?”.

Only 3% of those who responded stated that their firm is fully prepared for the changes.

With several months to go before the 1^st September implementation date, it’s perhaps unsurprising that the vast majority of firms still have work to do.

Whilst over 60% of respondents stated that their firm is in the process of agreeing its approach to NFM, 11% responded that their firm is unsure exactly what needs to be done.

Of course, seeking to gain agreement across the firm for any changes to internal policies and procedures is important, particularly in a complex and nuanced area such as NFM.

However, as the September deadline draws closer, it’s vital that firms move from discussion of possible changes to their implementation.

Any regulatory change can generate queries relating to its practical implications. In our experience, the new FCA rule and guidance on NFM are presenting firms with a particularly complex set of considerations.

In our webinars and training sessions, we have responded to a range of queries from firms – three of the most frequently-asked questions are outlined below.

Note that the following assumes that the firm is familiar with the details of the new rule and guidance and focuses on the practical implications for firms’ internal frameworks and processes.

• Who is responsible for the firm’s response to NFM?

One of the most frequently raised practical issues around NFM is who should take responsibility for the firm’s response to it. This often focuses on the accountability of specific senior managers.

Under the Senior Managers and Certification Regime (SM&CR), the FCA expects there to be clear personal accountability for each key aspect of a firm’s activities, including Conduct Rules breach reporting (whether financial or non-financial).

However, one of the distinctive features of NFM is that the firm’s response to it typically spans multiple functions within the firm. In all but the smallest of firms, a robust and effective approach to NFM is likely to require input from both the HR and Compliance functions as a minimum.

NFM is not a minor administrative issue which can be delegated in its entirety – it requires ongoing senior management engagement.

There can also be practical issues regarding the relationship between HR and Compliance to work through – this regularly prompts questions relating to which department should take the lead, and the types of information which should be shared between the two functions.

Indeed, questions have even been raised about how to handle situations where one function refuses to disclose information to the other, although queries of this kind tend to point to a more fundamental disagreement, with implications that reach well beyond NFM.

• How should the firm handle issues that relate to an employee’s private life?

The FCA guidance addresses the question of employees’ private lives at some length. A basic starting point is that, in general, NFM in an individual’s private life is outside the scope of the Conduct Rules but it may potentially be relevant where the individual is subject to the Fit and Proper test.

Yet there are nuances (for example, relating to social media) and the regulator makes clear that it is not possible to issue definitive guidance covering every possible scenario.

This means that firms need to consider carefully the various types of scenarios they may encounter, and how they would deal with them, including the differences between senior management function (SMF) holders, certification employees, and employees who are solely subject to the Conduct Rules.

Given the personal and often sensitive nature of NFM incidents, firms should ensure that their internal policies and procedures clearly set out the firm’s approach, including any distinctions between different categories of employee. At the same time, firms will typically want to avoid mixed messaging which suggests that NFM is only a problem if the (alleged) perpetrator performs a certain type of role. This brings us to the final topic covered in this article – communication and training.

• How should the firm approach training? Is it only relevant for senior managers or do all staff need to be retrained?

Most firms have implemented initial and ongoing/refresher Conduct Rules training for their employees. However, the implementation of the new NFM rule and guidance has prompted a range of questions regarding the need for additional training relating specifically to NFM.

While some firms are opting for standalone training, many are seeking to incorporate training on NFM into their regular Conduct Rules training programme.

However, communication and training on NFM presents distinctive challenges.

Firstly, it is a complex and nuanced topic, where it is not always possible to draw simplistic conclusions. Secondly, as noted above, the distinctions between the scope of the Conduct Rules and the Fit and Proper test give rise to the risk that, if not handled correctly, employees will experience mixed messaging.

Specifically, poor communications can suggest that certain types of conduct are allowable for some employees and not others.

As the deadline approaches, firms must move beyond policy updates and ensure their governance, HR and Compliance functions are aligned, their escalation processes are clear, and their training is practical and role-specific. NFM is a complex and sometimes sensitive topic, but regulatory expectations are clear: firms must demonstrate thoughtful judgement, consistent application and strong senior management engagement. Preparation now will not only reduce regulatory risk but also strengthen culture and accountability across the organisation.

CCL Academy has been working with clients to navigate these challenges, and find practical, workable solutions. To ensure your teams are fully prepared for the 1 September conduct rule deadline and equipped to manage NFM effectively, get in touch.

Nigel specialises in training boards, senior executives and other staff on the impact of regulation and regulatory change.

He is a CFA Charterholder and Chartered Fellow of the CISI, with over 20 years' of industry experience.

With a background in compliance in private banking and wealth management, Nigel has a particular interest in effective corporate governance and the management of compliance and regulatory risk. His interests also include issues relating to ESG and climate risk, conduct and culture (including non-financial misconduct), and all aspects of financial crime prevention, as well as the impact of fintech on compliance and regulation.

Recent assignments have included briefing multiple boards and executive teams on the Consumer Duty, delivering compliance and ethics training for senior managers and front-office staff and creating a user-friendly risk and compliance handbook for a major bank.