LONDON (Reuters) -Britain's Financial Conduct Authority is to extend rules covering non-financial misconduct such as bullying and discrimination to beyond the banking industry, it said on Wednesday.
UK Financial Watchdog Expands Non-Financial Misconduct Rules Beyond Banks
By Nell Mackenzie
LONDON (Reuters) -Britain's Financial Conduct Authority is to extend rules covering non-financial misconduct such as bullying and discrimination to beyond the banking industry, it said on Wednesday.
The UK watchdog will also oversee how finance firms handle "serious, substantiated cases of poor personal behaviour", information that will be shared through regulatory references in the same way financial misconduct currently is. That will make it harder for individuals to avoid consequences by moving from firm to fir, the FCA said.
"Behaviour like bullying or harassment going unchallenged is one of the reddest flags – a culture where this occurs can raise questions about a firm's decision making and risk management," said Sarah Pritchard, the FCA's deputy chief executive.
The rules for non-financial misconduct will be extended to around 37,000 other regulated firms from 1 September 2026 after a year-long consultation period.
The new rules are to increase consistency across the industry and deepen trust in financial services, Pritchard added.
Concerns about bad behaviour at finance firms have soared up the regulatory agenda in recent years and the FCA has been under pressure to explain how it will tackle the problem.
Last year it published its first comprehensive study into the scale of the problem, and found that reports of bullying, discrimination and other non-financial misconduct in Britain's finance industry had surged almost 60% over three years to 2023.
More than one third of firms did not report such cases to their boards, the regulatory survey last year also showed.
The survey also found many firms lack appropriate governance structures in place to deal with such incidents.
"Toxic cultures like bullying, harassment and discrimination often correlate with risky financial behaviour and high-profile cases have damaged reputations, investor confidence which often result in big losses," said Anu Chhabra, a private markets business development executive and founder of the Women in Finance Group.
(Reporting by Nell Mackenzie; Editing by Tommy Reggiori Wilkes)
