FCA Expands Bullying and Harassment Reporting Rules

The Financial Conduct Authority (FCA) has announced sweeping changes to its approach to workplace misconduct, extending non-financial misconduct reporting requirements to 37,000 financial services firms from September 2026.

Previously limited to banks, the new rules will require hedge funds, insurers, and pension companies to report “serious, substantiated poor personal behaviour” – including bullying, harassment, and even misconduct outside the workplace – through the same channels used to report financial wrongdoing. The FCA says this move aims to crack down on “rolling bad apples” and embed cultural accountability across the sector.

In a feature by People Management, Spencer West Employment and Litigation Partner Justin Murray welcomed the FCA’s ambition but raised concerns about enforcement.

“From an employee’s perspective, the draft guidance on addressing workplace non-financial misconduct is a positive development, but there remain significant shortcomings,” Justin said.

“Employees who face bullying or harassment often rely on internal grievance processes, which may be dealt with unfairly, leaving them only the option to resign and pursue lengthy employment tribunal claims, often resulting in stigma and reduced employability.”

Justin also warned that the current system provides limited recourse for wrongly accused individuals and lacks clear mechanisms for overturning flawed disciplinary decisions or correcting regulatory references. Without improvements, he argues, the effectiveness of the rules could be compromised.

While the reforms signal a strong shift toward greater transparency and cultural integrity, employment lawyers and HR experts alike are calling for clearer guidance, robust due process, and practical protections for all parties involved.

Read the full article on People Management.