FCA Non-Financial Misconduct Rules: Governance Risk for Financial Services Firms

FCA non-financial misconduct rules: the leadership challenge for financial services firms 

On 1st September 2026, the FCA non-financial misconduct rules come into force for financial services firms. 

For many financial services firms, the discussion around non-financial misconduct has focused on HR, conduct investigations and employee relations. 

However, the bigger issue sits with leadership teams and governance. 

The FCA has made clear that serious bullying, harassment and violence can have regulatory consequences. Questions around workplace misconduct, fitness and propriety, conduct risk, governance and culture now become matters that boards and senior executives need to understand and oversee. 

The risk is not that firms fail to write a policy.  

The risk is that leadership teams cannot demonstrate control.  

When a serious allegation emerges, senior leaders eventually face difficult questions.  

• How quickly was the issue identified?
• Who conducted the investigation?
• What evidence was considered?
• Why was a specific conclusion reached?
• Has the organisation handled similar cases consistently?
• What did management know and when did they know it?
• How was the board informed?

Those questions often expose weaknesses that remain hidden during day-to-day conduct risk and governance processes. 

Information is spread across multiple systems. Reporting is inconsistent. Different functions maintain different records. Decisions are documented in different ways depending on who handled the workplace misconduct investigation. 

The result is a governance problem.  

Leadership teams need to know that decisions can withstand scrutiny from regulators, legal teams and external reviewers. They need visibility into emerging patterns, repeat behaviours, concentrations of conduct risk and workplace misconduct investigation outcomes. 

Many organisations struggle to provide that confidence.  

The challenge is rarely a lack of effort.  

The challenge is the absence of a single, governed process for managing workplace misconduct allegations, investigations, evidence and outcomes. 

As the FCA non-financial misconduct rules move further into the regulatory spotlight, leaders will increasingly be judged on their oversight of workplace misconduct. Regulators will expect financial services firms to demonstrate accountability, consistency and effective governance. 

This is where technology becomes important.  

BlackRainbow NIMBUS provides a single environment for managing workplace misconduct investigations from allegation to outcome. Cases, evidence, decisions, actions and reporting are brought together in one place, creating visibility for investigators, management teams and leadership. 

For senior leaders, the value is straightforward.  

• A clear record of every decision.
• Reliable management information.
• Consistent workplace misconduct investigation processes.
• Transparency across the lifecycle of a case.
• Confidence that workplace misconduct allegations are being managed under appropriate governance.

The FCA has already established its expectations.  

The question for leadership teams is whether they have sufficient visibility, control and assurance to demonstrate those expectations are being met.  

Because when serious misconduct occurs, scrutiny ultimately lands at the top of the organisation.  

Sources:
FCA Policy Statement PS25/23: Tackling Non-Financial Misconduct in Financial Services and FCA Consultation Paper CP25/18: Tackling Non-Financial Misconduct in Financial Services.   

About the Author: 

Ralph Joseph is an enterprise sales leader with 18+ years helping US & EMEA software vendors enter new markets & scale revenue. As Strategic Sales Director at BlackRainbow, he is spearheading the drive into the Corporate Private Sector. A natural “First Boots” builder, he brings deep experience across BFSI, Telecom, Defence, Intelligence, Government & Manufacturing and is a practitioner of consultative, value selling.

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