Amendments to rules intended to strengthen individual accountability and improve workplace culture in the financial services sector come into force on 1 September.

The most important change is the extension of the application and scope of rules set out in its Code of Conduct ("COCON") sourcebook to cover serious bullying, harassment and violence connected to an individual's role in non-bank firms. This will bring alignment with the position for banks (for which these rules already apply to the performance of any functions relating to the carrying on of activities by the firm, whether regulated or not). For banks, the amendments bring some further clarity on what amounts to non-financial misconduct.

For further detail on the amendments, see our July 2025 briefing.

Here are some practical points to bear in mind as new arrangements become embedded in all financial services firms.

1. Firms should continue to review and adapt policies and governance arrangements

In our December 2025 briefing covering the FCA's finalised guidance, we explored some of the practical challenges associated with adjusting policies and governance arrangements.

The FCA's supervisory focus on arrangements such as anti-bullying and harassment policies, codes of conduct and whistleblowing, investigation and fitness and propriety assessment procedures will not end with implementation.

2. Fitness and propriety assessments cover more than Conduct Rules breaches

Fitness and propriety assessments and the Conduct Rules serve different purposes. The amendments to COCON focus on specified categories of work-related misconduct, but firms may take a broader range of relevant conduct into account when assessing a person's honesty, integrity and reputation.

This may include conduct occurring outside the workplace where it is relevant to fitness and propriety. As we noted in our March 2026 briefing, firms are not generally required to monitor employees' private lives to identify anything relevant to fitness and propriety. However, firms must take into account information about employees' private lives about which they are aware and there will be some ambiguous areas in which firms will have to make nuanced judgements about whether to explore conduct outside work and whether individuals pass the fit and proper test.

3. Robust record-keeping arrangements have never been more important

The changes now made to COCON have significant implications for how firms assess, document and communicate findings relating to non-financial misconduct. In practice, firms will need to make and record decisions on whether particular conduct constitutes a Conduct Rules breach, is relevant to fitness and propriety, or may trigger notification or disclosure obligations. Clear and consistent record-keeping will be particularly important in borderline cases, both to support internal decision-making and to be able to explain conclusions reached, if later challenged. Firms should also consider the impact of misconduct findings on certification processes, fitness and propriety assessments, communications with regulators and regulatory references provided to future employers.

For more details on specific points to consider when preparing regulatory references concerning employees who leave whilst under investigation, see our December 2025 briefing.

4. Non-financial misconduct arrangements will continue to attract regulatory scrutiny

The FCA has demonstrated a willingness to take action concerning the fitness and propriety of individuals in respect of egregious examples of non-financial misconduct. See commentary on the key cases in which it has done so in our March 2026 briefing.

The outcome of Upper Tribunal proceedings concerning its action against Crispin Odey for alleged breaches of integrity and governance requirements is currently awaited (further to hearings in March 2026). The Tribunal's findings in this case, the most significant and highest profile instance of non-financial misconduct related enforcement action taken to date by the FCA may influence its appetite for taking further similar cases in future.

Where it does decide that enforcement action is warranted against individuals who it finds to have engaged in non-financial misconduct, the changes made to COCON will provide the FCA with greater flexibility about how to proceed. It may now characterise a wider range of situations as Conduct Rule breaches.

For now, it is likely that the FCA's immediate focus will remain on close supervision of firms' policy and governance arrangements and challenging firms on how they have responded, or intend to respond, to particular non-financial incidents. It will remain closely interested in how effectively firms' arrangements are operating in practice to enable firms to identify and respond appropriately to instances of potential non-financial misconduct.