UK financial watchdog expands bullying rules to 37,000 City firms
It means that 'serious, substantiated cases of poor personal behaviour' by senior managers at a range of firms including hedge funds, insurers and pension firms will have to be reported to the Financial Conduct Authority (FCA), as well as future employers who are assessing whether new hires are fit and proper for the job.
Previously, only banks were required to report bad behaviour to the watchdog. The rules will now apply to tens of thousands of other firms across the City that are bound by the so-called senior managers and certification regime (SM&CR) that is meant to hold senior bosses accountable for wrongdoing at their firms.
The regulator said the expanded rules would help 'prevent 'rolling bad apples' – people moving from firm to firm without appropriate action being taken or without past serious non-financial misconduct being disclosed'.
Sarah Pritchard, the FCA's deputy chief executive, said: 'Too often when we see problems in the market, there are cultural failings in firms. 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.
'Our new rules will help drive consistency across industry and support the vast majority of firms that want to do the right thing to deepen trust in financial services.'
The expanded rules on non-financial misconduct, which also cover racism, sexual harassment and violence and intimidation, will come into force on 1 September 2026. However, they will not apply to payments and e-money firms, regulated investment exchanges or credit ratings agencies, none of which are subject to SM&CR rules.
The FCA recently won a tribunal challenge brought by the former Barclays boss Jes Staley, with judges upholding a lifetime ban against the former chief executive for misleading the regulator over the nature of his relationship with the convicted child sex offender Jeffrey Epstein and their last point of contact.
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The new rules come despite the FCA and fellow regulators facing mounting pressure from the government to slash red tape for businesses.
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