The clock is ticking for financial services firms to prepare for the UK’s Financial Conduct Authority’s (FCA) new non-financial misconduct (NFM) framework, which comes into force on September 1, 2026. Following overwhelming industry demand for clarity – 95% of consultation respondents requested additional guidance – the FCA published revised guidance in December 2025 that offers valuable insights into regulatory expectations.

What is changing?

The framework applies to all firms under the Senior Managers and Certification Regime (SMCR), integrating NFM into the FCA Code of Conduct (COCON) and Fit and Proper test (FIT). This represents a significant expansion of regulatory expectations, with the FCA now shifting from policy development to active supervisory engagement.

The revised guidance includes new flow diagrams embedded in the FCA Handbook, scenario tables for complex situations, clearer alignment with employment law and important clarifications on manager accountability that address industry concerns about disproportionate liability.

Understanding the scope

NFM covers serious misconduct including bullying, harassment and violence. Importantly, the FCA has aligned the “seriousness” threshold with the Equality Act 2010 standard for harassment. Minor workplace behaviour that does not violate dignity or create an intimidating, hostile or offensive environment would not be in breach of FCA rules.

The guidance provides practical clarity on the work-life boundary through comprehensive scenario tables covering client events, training courses, social occasions, remote working and social media. While COCON does not apply to private life, conduct at work-related events like investor roadshows, conferences or client dinners falls within scope.

In a notable revision, the FCA deleted the word “offensive” from social media guidance, clarifying that lawful expression of controversial views would not automatically call fitness into question. Firms need not monitor staff’s private lives or investigate trivial allegations.

Manager responsibilities

Managers must take reasonable steps to prevent NFM, but the FCA has clarified they will not be held responsible for misconduct they could not reasonably have known about or did not have authority to address. This calibration to actual knowledge and authority provides welcome clarity, particularly for lean management structures.

Implementation priorities

Firms should focus on three key areas:

  • Policies and training: Update codes of conduct, HR policies and whistleblowing procedures with clear NFM definitions. Provide tailored training for different groups; for instance, investment professionals on conduct at client events, managers on prevention duties and HR teams on how to appropriately respond to allegations.
  • Governance: Establish effective triaging criteria to avoid over-burdening compliance resources while ensuring serious matters are properly addressed. Create clear escalation pathways and ensure boards receive regular NFM reporting.
  • Culture: Foster speak-up environments with accessible grievance procedures and whistleblowing channels. Use employee surveys and exit interviews to identify issues before they escalate.

The bottom line

The FCA is taking a pragmatic approach, focusing on how policies work in practice rather than tick-box compliance. Firms that treat the September 2026 implementation deadline as an opportunity to strengthen culture, and not merely as a routine compliance exercise, will be best positioned to respond to the enhanced regulatory scrutiny that will inevitably follow.

Learn more about the new framework here.