Where does workplace misconduct become regulatory risk? Chloe-Jane Belton explores the increasingly blurred boundaries of culture, character & compliance
- The FCA’s non-financial misconduct regime blurs the boundary between HR issues and regulatory risk.
- Firms need proportionate, evidence-based decisions that distinguish serious misconduct from everyday workplace friction.
For years, regulated firms have drawn a relatively clear line between misconduct that belonged to HR and misconduct that belonged to the regulator. Bullying complaints, inappropriate behaviour at work events and allegations of harassment were undoubtedly serious matters, but they were generally addressed through employment processes rather than regulatory ones. That distinction is becoming increasingly difficult to maintain.
The Financial Conduct Authority’s (FCA’s) non-financial misconduct (NFM) regime, which came into force on 1 September 2026, represents a significant development for non-bank firms. By extending the scope of the Conduct Rules to capture certain forms of bullying, harassment and violence, the FCA has narrowed what was once a clear divide between employment matters and regulatory risk. While much of the discussion has focused on implementation,
