FCA expands bullying and harassment rules

The Financial Conduct Authority has announced a substantial extension of its rules on non-financial misconduct, bringing more than 37,000 firms including asset managers, insurers, and hedge funds within scope from 1 September 2026. For the first time, organisations governed by the Senior Managers and Certification Regime will be required to report serious instances of bullying, harassment, racism, and related misconduct by senior staff.

Previously, these requirements applied only to banks. Now, a much broader range of firms must:

• report substantiated personal misconduct, including sexual harassment, intimidation, and discrimination, to the FCA
• ensure future employers are informed when candidates are not fit and proper due to non-financial misconduct
• foster internal cultures that uphold high standards of conduct and sound decision-making

This development is intended to address the problem of rolling bad apples, referring to those who avoid accountability by moving between firms without their past conduct being disclosed. As the FCA’s Sarah Pritchard has observed, a failure to challenge bullying or harassment raises serious questions about a firm’s culture and risk management.

The expansion of these rules signals that workplace culture is now central to regulatory expectations. Firms that delay in addressing these issues risk not only FCA scrutiny but also reputational harm among clients, investors, and staff.

Although the rules take effect in September 2026, the task of embedding effective systems such as leadership training, reporting pathways, and staff awareness should begin now.