Regulatory expectations and practical judgment
Non-financial misconduct continues to be a central regulatory focus for the FCA and a live issue for regulated firms and the individuals who work in, and with them. Allegations relating to behaviour, culture and governance can have significant consequences for firms and for individuals, and the FCA has made clear that it remains determined to challenge non-financial misconduct just as much as conduct involving financial wrongdoing. However, the responsibility for managing non-financial misconduct on a day-to-day basis remains very much with firms themselves – and it continues to present a very real challenge both for firms, and individuals who are accused of having committed non-financial misconduct.
In December, the FCA published its long-awaited policy position on non-financial misconduct (PS25/23). While the direction of travel is clearer, uncertainty remains for firms regarding how expectations will be applied in practice and how issues should be handled when they arise. This will of course also be a matter of concern for individuals accused of non-financial conduct.
Why this matters now
Non-financial misconduct issues often surface unexpectedly and require immediate decisions to ensure that they are handled appropriately from both a regulatory and employment law perspective. Allegations involving bullying, harassment and discrimination are also invariably sensitive, and confidential and can call into question issues of power imbalance and personal relationships as well as giving rise to evidential challenges. Firms (and all individuals caught up in the allegations) must assess risk, manage sensitive investigations, and consider regulatory obligations at the same time, frequently with incomplete information.
Common challenges include:
- How to identify and assess non-financial misconduct allegations
- How to manage sensitive investigations alongside employment and regulatory requirements
- When issues become reportable or engage regulatory obligations
- How to respond to FCA enquiries where expectations continue to evolve
In any of these situations, early, pragmatic and cohesive legal advice is critical in order to navigate these areas with confidence.
Our joined-up approach
Fox Williams advises on non-financial misconduct with a joined-up approach between our financial services regulatory and employment teams. Working together from the outset, our approach allows clients to consider all angles of risk and proceed with clarity.
How we support clients
Our advice is practical, commercially focused and grounded in extensive experience of handling these issues in real-world scenarios.
We work with regulated firms and senior individuals to:
- Assess regulatory and employment law risk at an early stage
- Manage investigations, including whistleblowing and speak ups sensitively and robustly
- Engage with regulators in a clear and considered way
- Manage regulatory reporting and notifications
- Guide them through regulatory reference obligations
- Support individuals and firms through FCA enquiries and ongoing supervision
- Manage ongoing employment and negotiated exits in accordance with regulatory requirements
Specifically for firms, we assist with:
- Reviewing and updating internal policies, processes and procedures
- Codes of Conduct and Values statements
- Reviewing Whistleblowing and Speak up channel effectiveness
- Reviewing culture and internal governance against regulatory and legal expectations
- Board briefings to ensure Board awareness of NFM issues and requirements and their legal and regulatory obligations
- Tailored and specific training for SMFs; Certified Staff and Conduct Rules staff to ensure that they are aware of their obligations and the firm’s expectations
Related Services
Our experience includes
- Conducting investigations for banks, FinTechs and corporates following allegations of non-financial misconduct, including bullying, harassment, discrimination, culture and governance concerns
- Advising regulated firms on regulatory obligations arising from non-financial misconduct issues, including engagement with regulators and key stakeholders
- Supporting firms responding to FCA queries involving non-financial misconduct allegations and how concerns have been addressed including s166 reviews
- Advising senior executives subject to internal investigations and regulatory queries arising from allegations of non-financial misconduct
- Supporting whistleblowers in raising and escalating concerns
- Working with trade bodies and associations and engaging with the regulators to represent views and ensure that regulatory guidance is practical, pragmatic and effective
Speak to us
For more information or to discuss how these developments may affect your business, please contact:
