Latest Market Alert | 23 July 2026
Executive Summary
The Financial Conduct Authority’s expanded guidance on serious non-financial misconduct comes into force on 1 September 2026, extending clearer conduct expectations to approximately 37,000 additional regulated firms.
The changes reinforce that serious misconduct—including bullying, harassment and violence—may affect an individual’s fitness and propriety and, where appropriate, future regulatory references.
Why it Matters
The changes place greater emphasis on governance, culture and consistent disciplinary processes across FCA-regulated businesses.
Poor handling of misconduct allegations could expose firms to:
- regulatory investigation;
- employment disputes;
- reputational damage;
- governance failings;
- increased senior management accountability.
UK Impact
Insurers, brokers, lenders, investment firms and financial advisers should review conduct policies, disciplinary procedures and regulatory-reference processes before the September implementation date.
The FCA has also confirmed firms are not expected to investigate trivial or implausible allegations, reinforcing the importance of proportionate, evidence-based decision making.
Global Impact
International financial groups operating in the UK should ensure overseas disciplinary processes align with UK regulatory expectations where employees perform regulated functions.
Our View
This should be treated as a governance review rather than simply an HR exercise.
Recommended actions:
- Review conduct and disciplinary policies.
- Update whistleblowing and escalation procedures.
- Train managers on evidence handling and regulatory expectations.
- Review regulatory-reference processes.
- Ensure decisions are consistently documented.
- Test governance arrangements before 1 September.
Risk Indicator: High
Disclaimer
The information contained within this Market Alert is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment or insurance advice. Whilst every effort has been made to ensure the accuracy of the information at the time of publication using reputable and independently verified sources, legislation, regulation and market conditions may change. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.