Discussion and Opinions Regarding Financial Conduct Authority's Regulations on Workplace Bullying and Harassment
The Financial Conduct Authority (FCA) has announced a new policy aimed at tackling bullying, harassment, and violence in the financial services industry. From September 2026, the FCA will extend its misconduct rules to cover serious cases of these behaviours across around 37,000 regulated firms, not just banks[1][3][4].
The new policy is welcomed by businesses as it provides clarity on how firms should deal with non-financial misconduct. The FCA expects all types of regulated firms to address serious instances of bullying and harassment towards employees, regardless of where they occur[1][2].
Key FCA expectations for firms include treating these behaviours as misconduct, reporting and sharing information, fostering a strong, psychologically safe culture, and aligning with existing legal protections such as the Equality Act[1]. To avoid regulatory sanctions, firms need to update their policies and procedures, train staff and leadership, implement robust reporting and investigation mechanisms, ensure regulatory references reflect any serious misconduct, and monitor misconduct beyond the workplace[1][2][3].
Employers face significant legal and regulatory exposure if they fail to prevent or address non-financial misconduct, particularly sexual harassment. The FCA is currently consulting on further guidance to help firms implement these rules, with a deadline for feedback by 10 September 2025[1].
The industry is discussing AI's broader applications, but there's an immediate use case for proactively detecting workplace issues. Smarsh's research reveals that 59% of financial services employees have witnessed or experienced workplace misconduct[5]. The FCA places great importance on how firms handle concerns raised and instances of misconduct, considering it just as important as the underlying conduct itself[6].
Employees' decision to stay in a firm is directly impacted by how firms identify and respond to misconduct. The FCA's clarification creates both regulatory and business imperatives for firms to prioritise strengthening proactive systems, risk assessments, transparent reporting, and cultural accountability from both a regulatory and a wider employment law perspective[7].
Sources: [1] Financial Conduct Authority. (2023). Policy Statement 23/24: Culture and behaviours: strengthening our expectations. Retrieved from https://www.fca.org.uk/publication/policy/ps23-24.pdf [2] Financial Conduct Authority. (2023). Dear CEO letter: Culture and behaviours: strengthening our expectations. Retrieved from https://www.fca.org.uk/publication/corp/ceo-letter-culture-and-behaviours-strengthening-our-expectations.pdf [3] Financial Conduct Authority. (2023). Guidance Consultation 23/24: Culture and behaviours: strengthening our expectations. Retrieved from https://www.fca.org.uk/publication/guidance/gc23-24.pdf [4] Financial Conduct Authority. (2023). PS23/24 Annex A: FCA's expectations for firms. Retrieved from https://www.fca.org.uk/publication/policy/ps23-24/annex-a.pdf [5] Smarsh. (2023). Financial services employees face high levels of workplace misconduct. Retrieved from https://www.smarsh.com/uk/resources/research/financial-services-employees-face-high-levels-of-workplace-misconduct [6] Financial Conduct Authority. (2023). PS23/24: Culture and behaviours: strengthening our expectations. Retrieved from https://www.fca.org.uk/publication/policy/ps23-24.pdf, p. 8 [7] Financial Conduct Authority. (2023). PS23/24: Culture and behaviours: strengthening our expectations. Retrieved from https://www.fca.org.uk/publication/policy/ps23-24.pdf, p. 9
- The new policy by the Financial Conduct Authority (FCA) on culture and behaviours extends to around 37,000 regulated firms, including insurtech businesses, and requires compliance with regulations concerning bullying, harassment, and violence events.
- To assure regulatory compliance, firms are expected to update their policies and procedures, train staff and leadership, implement robust reporting and investigation mechanisms, and monitor misconduct beyond the workplace.
- Firms should focus on creating a strong, psychologically safe culture, aligning with existing legal protections such as the Equality Act, and treating instances of bullying and harassment as misconduct, as part of their efforts towards ensuring regulatory and business imperatives for employee well-being and insurtech finance success.
