Thought for the Week: Non-financial misconduct is misconduct - but is it plain and simple?
29 September 2023
29 September 2023
In recent years, the FCA has made it clear that non-financial misconduct, including sexual harassment, bullying and discrimination, is misconduct "plain and simple". Last week, in a consultation paper released in tandem with that of the PRA, it has finally issued the proposed rule amendments and guidance to FIT and the Conduct Rules (COCON), which it hopes will solidify these strong words into action (see our briefing with a summary of proposed changes).
COCON is to be expanded to include behaviours such as bullying and sexual harassment, although these will not bite in relation to behaviour in personal or private life. The proposed new guidance should assist firms when assessing whether an individual has breached Conduct Rules in the twilight area between work and personal life, enabling them in some cases to push back on supervisors who may be keen for them to treat poor behaviour in an individual's personal life as a Conduct Rule issue.
However, there are aspects to the proposed amendments to FIT and COCON that we feel are certainly not "plain and simple" and will require further work from the regulators. In particular:
Firms should start considering now where their risks might lie. In many respects the new provisions will give them greater clarity on how to treat misbehaviour by their staff, whether inside or outside the office. The FCA is clearly stepping up a gear on non-financial misconduct and firms will need to be ready with a forward-looking strategy to ensure that rigorous fitness and propriety assessments are conducted, the conduct of staff is monitored carefully and that there are robust systems in place to ensure that staff grievances can be heard and investigated appropriately.
Authors: Nathan Willmott, Adam Jamieson, Eleanor Robinson