Non-financial misconduct checklist

Are you ready for the FCA’s new rules on non-financial misconduct?

On 12 December 2025, the FCA published Policy Statement PS25/23, finalising guidance that will reshape conduct standards across financial services. These changes—amending COCON and FIT—come into force on 1 September 2026, giving firms less than nine months to prepare.

Use our checklist now to make sure your organisation is ready.

Authors

Polly James

Tegan Goddard

Read time

2 min read

Published date

27 Jan 2026

Triage protocol between HR and Compliance

Historically, non-financial misconduct was handled by HR, and regulatory breaches by Compliance. PS25/23 requires these functions to work a lot more closely together. When a non-financial misconduct report is filed, it will be important for HR to immediately notify Compliance (and visa versa) to assess if the conduct meets the regulatory breach threshold.

Regulatory references

Firms will need to review and update their regulatory referencing policies to reflect the latest guidance on non-financial misconduct and its application to the fitness and propriety test, including covering the situation where the firm has received an allegation of non-financial misconduct outside work.

Working Committee

Consider setting up an internal committee to review anonymised non-financial misconduct cases from the past five years. Consider, for example, whether under the new rules, the complained of behaviour would have been a breach. This will help give firms a baseline for consistency.

Internal market watch

Consider participating in industry forums to benchmark against other firms’ “seriousness” thresholds. This will help provide guidance on how other firms are practically dealing with the application of the new rules.

Training

Firms have a statutory duty under Section 64B of the Financial Services and Markets Act 2000 to take all reasonable steps to secure that all staff subject to the Conduct Rules understand how those rules apply in relation to them. Firms must brief their Conduct Rules staff on the nuances of this new FCA guidance and implement clear internal guidelines on notification obligations. Generic "tick-box" training will not suffice. Staff need to understand the nuance of the new "subjective/objective" test; if an SMF fails to notify the regulator because they assumed their private life was off-limits, the firm could also face scrutiny for failing to train them properly. Managers need to specifically be made of aware that as part of their obligations under Conduct Rule 2, “turning a blind eye” will potentially be a regulatory breach. Firms cannot rely on SMFs to "just know" this.