FCA non-financial misconduct
Bullying, harassment and violence are now Conduct Rules matters
What is this?
The FCA expanded non-financial misconduct rules in September 2026 to cover 37,000 more financial services firms. Is your FCA-regulated firm covered?
The rule: COCON 1.1.7FR extends the Conduct Rules to cover serious incidents of bullying, harassment or even social media posts, where there is sufficient connection to an employee’s work.
How does it affect me?
Firms do not have to pry into the private lives of their employees, which brings its own employment law risk. But neither can firms ignore how an individual’s behaviour might affect their fitness and propriety.
The hard part is for compliance and HR to know how to exercise judgment. To conduct investigations fairly, legally, and balancing both FCA rules and employment law.
Quick facts
Rule
COCON 1.1.7FR
Guidance
PS25/23, final guidance published December 2025
In force
1 September 2026, not retrospective
Who it applies to
Non-bank SM&CR firms with a FSMA Part 4A permission, roughly 37,000 firms. Banks were already covered
What it covers
Serious bullying, harassment including sexual harassment, and or personal conduct in connection with work
Threshold test
A sufficient work-related connection to the individual's role
Conduct Rules engaged
Individual Conduct Rule 1 (integrity) and Individual Conduct Rule 2 (due skill, care and diligence)
Relevant factors
Impact, whether part of a pattern, duration, seniority and power imbalance. A single incident can be enough
Private life
Outside COCON, but relevant to the Fit and Proper test where it shows a material risk to regulated conduct
Social media
No duty to monitor. Assess under FIT if it comes to the firm's attention
Regulatory references
Serious, substantiated cases may need to be disclosed
Managers
Expected to take reasonable steps to prevent and address serious misconduct in their areas
What it does not mean
Every HR breach is a Conduct Rules breach, or that firms must police private lives
Explore more
- Non-financial misconduct: what the FCA’s final guidance really changes and what firms must do next
- FCA non-financial misconduct rules are now in force: what firms need to know
- Non-financial misconduct and SMCR Phase 2: your questions answered
- How FCA whistleblowing data is quietly shaping regulatory risk
- How to handle a sexual harassment complaint from day one