From the 1st of September 2026, the Financial Conduct Authority (FCA) will expand its conduct rules to cover serious behavioural misconduct, including bullying and harassment, extending oversight to an additional 37,000 solo-regulated firms including hedge funds, insurers, and pension providers. All substantiated cases, whether inside or outside the workplace, must be reported to the FCA, aligning personal conduct standards with those for financial misconduct. The move aims to end the practice of ‘rolling bad apples’, namely individuals with a history of poor behaviour moving unchecked between employers, and to ensure consistent cultural standards across the sector.
For managers and senior staff, the change is a major shift in accountability. Under the FCA’s Individual Conduct Rule 2, senior staff may be held accountable not just for their own actions, but also for failing to address misconduct within their team(s). HR teams will need to reassess how they measure leadership performance, with early intervention and cultural oversight becoming essential. The FCA’s draft guidance, which also considers social media and personal-life behaviour when assessing ‘fit and proper’ status, is open for consultation until the 10th of September 2025, with legal experts cautioning that practical challenges lie ahead.
