Non-Financial Misconduct – The next steps

The FCA’s long-awaited rule and guidance will take effect from 1 September 2026. Following a lengthy development period, from September 2023 to December 2025, firms now have limited time to implement the required changes.

In this article, Peter Haines, Director of GRC Training, outlines what UK financial services firms should be doing in relation to non-financial misconduct to meet regulatory expectations and maintain a positive workplace.

Our recent poll of Senior Managers found that 30% identified Senior Management focus as the biggest challenge they currently face.

This is particularly concerning given the reputational impact of non-financial misconduct (NFM) on both individuals and firms.

Senior Management must prioritise how to identify NFM, how to tackle it, and how to ensure that their firm’s culture remains healthy and represents a safe workplace environment.

The poll also revealed that 39% of Senior Managers consider training to be the largest NFM challenge.

The FCA has been very clear in its expectation that employees should receive role-specific training on the Conduct Rules and, if there has been any doubt as to whether NFM should be included in Conduct Rules training, the 1 September deadline, and the new provisions in COCON should remove that doubt completely.

We have been training on the Conduct Rules for several years now, and many of our case studies, which can be tailored towards particular firms, are based on NFM issues.

Additionally, 26% of respondents indicated that handling NFM breaches represents their biggest challenge. It is hardly surprising that Senior Managers see this as their top concern. It involves difficult judgements by Senior Management, along with Compliance and HR colleagues. There is also added complexity due to Conduct Rule breach reporting and its impact on regulatory references and fitness and propriety assessments.

So, what should firms be doing next?

• Firms should now focus on ensuring Senior Management and the Board are fully engaged. NFM is here to stay and the FCA is committed to raising standards. The link between NFM and most of its statutory objectives shows its strategic importance.
  
  

“Trust in financial services is paramount. Where misconduct goes unchecked, it can harm individuals, firms and confidence in the sector. Tackling non‑financial misconduct (NFM) in financial services firms supports all 3 of our operational objectives – as well as supporting growth and international competitiveness by helping to improve the UK financial sector’s reputation, strengthening its access to global talent and increasing market and consumer confidence.”  PS 25/23, December 2025

• The next priority is for Compliance and HR (or People Services) to work collaboratively in identifying, processing and, where necessary, reporting Conduct Rule breaches. There is no room for private turf battles between Compliance and HR (not unheard of historically) in this area, because it’s crucial to get the right people to make the right judgements. This is particularly important where misconduct is potentially reportable. In the context of NFM, it will be serious incidents such as violence, bullying and harassment. The FCA does provide guidance, but this cannot cover all eventualities.
  
  

“… it is impossible to give an exhaustive list of the circumstances in which misconduct will breach our rules, so firms will still need to exercise judgement.” CP25/18

In such circumstances, good governance dictates that Compliance, HR and Senior Management should work together to assess the seriousness of the misconduct and determine whether it should be reported to the FCA.  

Ideally, the representative responsible for Conduct Rules reporting and training should be involved. If that individual also serves as the Compliance Officer (as is often the case), an additional member of the C-suite should participate to ensure balanced oversight.

A key solution to NFM is often achieved through good remediation and good management. It is important for firms to demonstrate a zero tolerance for NFM, with disciplinary action taken in serious cases.

That said, combining accountability with effective, targeted coaching can help individuals learn from their mistakes and help to contribute towards a healthier workplace culture.

Evidence of a toxic culture must be addressed swiftly and decisively. As the FCA has noted, “culture is contagious” – and so is a toxic environment. Undue tolerance of inappropriate behaviour has the potential to accelerate its spread, which, in turn, may unleash the wrath of the regulator on Senior Management who display such undue tolerance.

With the 1 September conduct rule deadline approaching, firms should act promptly. Updating their policies, establishing clear governance around NFM and conduct, and scheduling training well in advance are essential to ensure full preparedness for September.

To ensure your teams are fully prepared for the 1 September conduct rule deadline and equipped to manage NFM effectively, get in touch to discover how CCL Academy’s tailored in-house and digital training solutions can support your firm.

Webinar: Non-Financial Misconduct: The Next Steps

Join us for a focused webinar where Peter Haines and Nigel Sydenham explore what is changing, and how firms can ensure they are meeting the FCA’s expectations.

Date: Tuesday 24th February 2026
Time: 2:00 pm - 2:45 pm
Delivery: Virtual, Zoom

Complete the form below to register your place.

Peter has over 35 years’ experience in the field of regulation and compliance. A chartered accountant, Peter spent 6 years working with the UK’s SFA (now the FCA) and has headed up regional and global compliance functions at Paribas, UBS Investment Bank and Bank of America.

Since 2006, Peter has specialised in training, focusing on boards, senior management and assisting the next generation of compliance officers. His coverage includes most areas of compliance and financial crime, corporate governance and risk management. His style is inclusive, interactive and based on practicalities, not just rules.

As Director of GRC Training, he works closely with our clients to ensure that our programmes are tailored to their exact needs and meet, or surpass, their expectations.