FCA Non-Financial Misconduct Rules: 1 Sept 2026

From 1 September 2026, non-financial misconduct — serious workplace bullying, harassment and violence — becomes an explicit Conduct Rule matter for around 37,000 additional UK financial services firms, not just banks. For businesses making senior appointments at FCA-regulated firms, the practical question this raises isn’t just “have we found the right candidate” — it’s whether the Fit & Proper evidence base behind that appointment is ready for a standard that’s now materially clearer than it was.

What’s Actually Changing

The FCA published its final guidance — Policy Statement PS25/23 — in December 2025, closing a consultation process that had been running since 2023. Two things take effect together on 1 September 2026:

• A new Conduct Rule (COCON 1.1.7FR), extending explicit Conduct Rule coverage of non-financial misconduct to solo-regulated firms — asset managers, insurers, wealth managers, payments firms and others — bringing them onto more comparable footing with banks, which have operated under equivalent expectations for some years.
• New Handbook guidance on FIT, clarifying how non-financial misconduct feeds into the existing Fit & Proper assessment — including where the boundary between work and private life sits, how unproven allegations should (and shouldn’t) be weighed, and what “reasonable steps” looks like for managers handling a concern.

The FCA has been explicit about scope: firms are not expected to actively monitor employees’ private lives. The obligation is to act where a firm becomes aware of credible information — typically a formal finding such as a tribunal decision, regulatory sanction, or an internal disciplinary outcome reached through a fair process — that could call an individual’s fitness into question, not to go looking for it.

Why This Matters for Senior Appointments Specifically

The rule applies to conduct from 1 September 2026 onward, but its real bite for hiring firms sits in two places that were already part of the Fit & Proper and regulatory reference framework, now with a materially clearer standard attached:

Regulatory references. Firms will be obliged to disclose serious, substantiated personal misconduct in regulatory references going forward. For a hiring firm, this raises the practical question of whether the reference process it runs is actually probing for this — a template reference request that only asks about disciplinary action for Conduct Rule breaches in the old, narrower sense may not surface what the new guidance now expects to be captured.

Fit & Proper self-disclosure. The FCA’s guidance reinforces that self-disclosure questionnaires need to substantively probe conduct history, not just criminal and regulatory findings. A candidate self-disclosure form built around “have you ever been convicted of…” style yes/no questions was already thin practice before this guidance — it’s now clearly out of step with what the FCA expects firms to be capturing.

What Firms Should Do Before 1 September

The FCA’s own advice ahead of the deadline is for firms to review their approach to staff policies and conduct breach reporting. In practice, that tends to mean:

• Reviewing Conduct Rules training content to ensure NFM scenarios are covered explicitly, not left implicit within a generic “act with integrity” module
• Checking that self-disclosure questionnaires used in recruitment and annual certification substantively probe conduct history
• Reviewing the regulatory reference request and response templates in use, to confirm they align with the broader disclosure standard now expected
• Making sure hiring managers and HR understand where the new COCON rule sits alongside — rather than replacing — the existing Fit & Proper framework under FIT

For the fuller technical detail on how this affects the Fit & Proper Test specifically, see our Fit & Proper Guide, recently updated to cover the new rule. For the Conduct Rules dimension and how it sits within the wider SMCR framework, see our SMCR Guide.

How FD Capital Can Help

FD Capital places CFOs, Finance Directors, MLROs, Compliance Officers and senior risk professionals into FCA and PRA-regulated firms, and Fit & Proper due diligence has always been central to how we run these searches. If you’re recruiting a senior role at an FCA-regulated firm and want to make sure your process is ready for the standard the new guidance sets out, we’re happy to talk it through.

This article is provided for general information purposes and does not constitute legal or regulatory advice. Firms should take their own legal advice on compliance with the new FCA rules. FD Capital Recruitment Ltd is registered at Companies House (no. 13329383) and is operated by an ICAEW-registered practice.