From 1 September 2026, the FCA will extend its Code of Conduct sourcebook (COCON) containing [rules on individual standards] to capture serious non-financial misconduct (NFM) in non-bank Senior Managers and Certification Regime (SMCR) firms, aligning these firms with obligations that banks have carried for years. The changes bring new notification duties, fitness and propriety implications and regulatory reference obligations. In assessing the relevance of NFM, firms will need to navigate a potentially complicated assessment of whether the conduct in question bears sufficient relation to the firm's business and personnel, as against whether the conduct arose in the course of a person's private or personal life.
The FCA will also bring in additional guidance in its Fit and Proper test for Employees and Senior Personnel sourcebook (FIT) as to when NFM and other forms of conduct are relevant to a fitness and propriety assessment.
This briefing sets out what is changing, who is affected, how this interfaces with employment law and what firms should do to prepare.
NFM covers a wide range of conduct that extends beyond the ordinary scope COCON to include behaviour not of a clearly financial nature such as bullying, harassment (including sexual harassment) and violence, where relating to persons involved in the business of the firm.
It is not merely an HR or employment law issue. The FCA treats NFM as a regulatory matter going to a firm's culture, governance and...
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