On December 12, 2025, the Financial Conduct Authority (FCA) published its final guidance on non-financial misconduct (NFM). This marks a significant development in how firms across financial services – and beyond – are expected to identify, assess, and manage behavior and misconduct. This guidance applies to banks and non-banks alike, reflecting both the regulator’s evolving expectations and industry feedback calling for greater clarity.
The final rules will come into force on September 1, 2026. While much of the draft guidance remains unchanged, the final version provides clearer framing around how NFM interacts with existing Conduct rules, the Senior Managers and Certification Regime (SM&CR), and the Fitness and Proprietary test (F&P).
Non-financial misconduct towards colleagues will now more clearly fall within the misconduct scope when it occurs in relation to the performance of an individual’s role. Although the aim of this guidance is clarifying the FCA’s expectations, a degree of uncertainty remains around how firms will apply the guidance in practice, and the challenges they may face translating high-level principles to operational decisions.
“It will be interesting to see the way firms identify and manage NFM going forward. The broad range of issyes which this has the potential to cover is likely to result in inconsistent application, and the threshold for reporting seems likely to differ depending on organizational risk appetite or tolerance, despite the example case studies the FCA has offered”
– Rob Mason, Director, Regulatory Intelligence – Global Relay
To be or not to be a bank that is no longer the question
Another notable aspect of the final guidance is its explicit application beyond banks, including expanding the scope to 37,000 non-bank firms. The FCA has been clear that NFM expectations apply equally, regardless of firm type, including those whose activities may historically have sat outside regulated areas.
Having already been subject to NFM rules, banks will have appropriate systems, controls, and policies in place to monitor for and escalate instances of non-financial misconduct. Non-bank firms may initially find themselves on the back foot and having to establish these systems from scratch – and against an increasingly looming deadline.
“Non-banks coming together with banks will bring those generally outside the regulatory spotlight into clear view, and it would be fair to expect a number of potential enforcement cases across areas of industry which previously avoided scrutiny.”
– Rob Mason, Director, Regulatory Intelligence – Global Relay
The Pros and (CO)CONs of NFM
The FCA has also sought to clarify how expanded NFM rules interface with the Individual Conduct Rules, particularly ICR1 and ICR2, and when behavior may escalate into a breach of COCON.
Here the FCA has outlined that harassment, intimidation, and other serious forms of misconduct are within scope, even where the behavior is not directed at a victim or does not immediately impact firm outcomes. Managers may also be held accountable where they fail to take reasonable steps to prevent or address misconduct they knew or should reasonably have known about.
Some firms had requested that the regulator provide a broader list of case studies and examples of NFM, but the FCA has said it “can’t provide guidance for every situation,” instead highlighting that ultimate responsibility to prevent, identify, and address NFM lies with firms.
The guidance is deliberately non-exhaustive, underscoring the expectation that firms apply judgment rather than relying on what Nathan Willmott, Partner at Ashurst, describes as “prescriptive rules”.
A clear message
For banks and non-bank firms alike, the message is clear – NFM can no longer be treated as a purely HR or conduct risk issue. Instead, it must be embedded within broader risk management, training, and accountability. As regulatory attention intensifies, organizations that fail to adapt may find themselves facing increased scrutiny in an area that is rapidly becoming central to the FCA’s mission to preserve market integrity.
To ensure your organization is meeting the evolving and ever changing nature of regulation to identify and capture instances of NFM across any digital communications channel, learn more about Global Relay’s range of connectors.
