As the FCA publishes new regulation on bullying and harassment in financial services firms, RSM UK says firms should take steps now to ensure compliance and review workplace culture ahead of the updated rules taking effect from September 1 2026.
Erin Sims, financial services senior analyst, RSM UK said: “Changing the culture of a firm takes significant time and effort, there is no short-term fix, so now is the ideal time for firms to start reviewing practices in line with the rules. The proposed expansion of the Code of Conduct and the Fit and Proper Test to explicitly address serious non-financial misconduct, including bullying, harassment and violence provides much-needed clarity and consistency for non-banking firms that previously operated under a narrower interpretation of regulatory expectations.
“While implementation and ongoing compliance costs may be significant, the long-term benefits, such as improved workplace culture and reduced reputational risk, are likely to outweigh these burdens. The FCA has made it clear that non-financial misconduct is a key indicator of a toxic culture, and firms must take proactive steps to address it.”
Firms should view this regulatory shift as a strategic opportunity to reinforce workplace culture and governance in anticipation of the rules.
- Proactive policy review: firms should begin reviewing and updating internal conduct policies, HR procedures and training programmes to align with the expanded scope of Code of Conduct and the Fit and Proper Test. This includes ensuring that policies explicitly address non-financial misconduct and outline clear reporting and disciplinary procedures.
- Cultural integration: embedding expectations around non-financial misconduct into performance management, leadership development and whistleblowing frameworks is critical. The FCA has emphasised that senior managers play a vital role in shaping and maintaining a healthy culture.
- Regulatory references: enhanced scrutiny of regulatory references will require robust documentation and fair, consistent disciplinary processes. Firms must balance transparency with fairness to avoid reputational or legal risks.
- Training and awareness: senior managers, HR teams and line managers should be trained on the revised expectations, particularly around the subjective and objective tests for determining the seriousness of misconduct and the application of Individual Conduct Rules.
Erin Sims concludes: “Firms that go beyond compliance and actively champion positive workplace cultures will not only meet regulatory expectations but also position themselves as employers of choice in a competitive talent market.”