Video

Helping you understand the FCA’s 2026 rules on non-financial misconduct

By:

Ali Crotch-Harvey

20 Mar 20262 min read

From 1 September 2026, the FCA’s expanded non-financial misconduct rules will come into force for all SMCR firms, marking a significant shift in how organisations are held accountable for workplace behaviour. Conduct such as bullying, harassment or intimidation will no longer be treated purely as an internal people issue; it will carry regulatory consequences and create real, measurable risk for firms.

Contents

In this video insight, Ali Crotch Harvey reveals why these changes matter and why managing nonfinancial misconduct is so challenging in practice. Definitions can be blurred, evidence is harder to gather, and conduct linked to employees’ private lives, including online behaviour, can still fall within scope.

The FCA will be looking for outcomes rather than boxticking, assessing whether firms can justify decisions with clear evidence and escalate issues with sound judgement.

Grant Thornton supports organisations in building frameworks that withstand scrutiny, from setting clear standards, to strengthening governance and managing sensitive cases. If you’d like help preparing for the new rules or testing your firm’s readiness, our specialists are ready to assist.

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Transcript

Nonfinancial misconduct is no longer just a people issue. It is a regulatory issue. Poor behaviour such as bullying, harassment or violence can now pose a material risk to a firm. From 1 September 2026, the FCA’s extended rules apply to all SMCR firms, not only banks.

This change matters because non‑financial misconduct can create real risk. The FCA expects firms to manage it with the same seriousness as financial misconduct. The updated Conduct Rules and Fit and Proper standards require stronger evidence, clearer judgements and better oversight. These sit alongside new duties in employment law and whistleblowing rules taking effect through 2026.

This is difficult work and presents a practical challenge for firms. Non‑financial misconduct is hard to define, evidence and escalate. Boundaries with private life can be complex, and social‑media activity can still be relevant.

What pressures are different parts of the sector facing?

Different parts of the sector face different pressure points:

insurers need consistent, market‑wide approaches
investment banks need stronger governance over interpersonal conduct
retail banks need better training for frontline managers
asset and wealth managers must formalise culture and conduct processes. These may have handled informally in the past

Across the board, the expectation is clear: firms must show they identify issues early, escalate them properly and act with sound judgement.

What is the FCA focusing on?

So what is the FCA looking for? The FCA will focus on outcomes, not just processes. It will ask whether your handling of a serious case strengthens rather than weakens your SM&CR position, and whether you can support decisions with evidence rather than policy statements alone.

At Grant Thornton, we help firms build frameworks that stand up to regulatory scrutiny. That includes helping firms:

set clear definitions with defensible standards
strengthen governance, oversight and escalation routes
manage sensitive and strategic non financial misconduct risks, such as exits and disputes

Non‑financial misconduct rules demand confidence and competence. We help firms build both. If you would like support preparing for the new rules or testing your readiness, we would be happy to help.