Conclusion

The FCA received a significant number of responses to its consultation, such was the level of interest in the proposed guidance. In our view, the FCA has listened and, while it states that the amendments are minor, some important and positive changes have been included in the final guidance.

We agree that tackling NFM is integral to building healthy, inclusive workplace cultures where people feel empowered to speak up, which in turn supports the FCA’s objectives. That said, aspects of the guidance consulted on went further than was necessary or proportionate.

Even with the revisions, the final guidance still means that a much wider range of conduct, both in someone's work life and their personal life, could now be considered in an assessment of whether they are fit and proper to continue in their profession. However, that does not, in itself, mean an individual will cease to be fit and proper. Where the FCA ultimately draws the line will become clearer as it starts to issue decision notices after considering cases of NFM. In the meantime, firms must decide where they will draw the line when making these assessments themselves: which conduct will be taken into account and what weight will it be given? Those judgements will be shaped by factors including the firm’s culture (both existing and desired), its assessment of the FCA’s likely position and its risk appetite.

Next steps

The guidance comes into force on 1 September 2026, along with the associated rule changes to the section of the FCA handbook that deals with the conduct rules (discussed in our article).

Firms will now need to assess their internal policies and processes to ensure that the broader range of conduct (including conduct in individuals’ personal lives) that may now amount to a regulatory issue is being identified and dealt with properly. Appropriate training will also need to be provided to staff.

If you would like assistance with any of these steps, please get in touch with our experts.