Tackling Toxic Culture: Bullying & Harassment
- Adempi
- Aug 12
- 3 min read
Updated: Aug 25
The FCA has confirmed its plan to treat serious bullying and harassment as misconduct in all financial firms.
In her foreword to the consultation paper, CP25/18, Sarah Pritchard, FCA Deputy Chief Executive set out the position that non-financial misconduct is not just a cultural concern but a systemic risk to firms and markets:
“One of the clearest warning signs of a failing culture is non-financial misconduct – behaviours such as bullying and sexual harassment – going unchallenged. Failure to tackle toxic behaviours drives away good people, prevents staff from speaking up and undermines performance. It damages growth and enables financial misconduct.”
The FCA’s consultation paper, reflects its long standing commitment to improve workplace culture, reinforcing the link between personal conduct and fitness to operate in financial services.
Closing the Gap
Bullying and harassment has long been recognised as a breach of Conduct Rules within banks, the absence of clear guidance for non-banks often created uncertainty.
Whilst many firms outside of banking have robust HR disciplinary and grievance procedures in place, the regulatory treatment of these sensitive matters remain unclear. This has being particularly challenging for firms when providing regulatory references and conduct breach notifications, and meant that handling of non-financial misconduct differed across the industry.
From 1 September 2026, the Conduct Rule that prohibits harassment against colleagues will extend beyond banks to around 37,000 other regulated firms. In addition to violent behaviour, this will cover conduct that violates a colleague's dignity or that creates an intimidating, hostile, degrading, humiliating or offensive environment for that person.
By explicitly recognising toxic behaviour such as bullying and harassment as regulatory misconduct, the FCA is addressing a long-standing grey area and the added consistency and clarity will be benefit those firms navigating these tricky issues.
Addressing behaviour beyond the office
The FCA is also seeking views on whether additional Handbook guidance would support firms to apply the new rules effectively. The draft guidance sets out how non-financial misconduct should be considered when assessing an if an individual is fit and proper and the relevance of an individual’s social media activity and behaviour in their private and personal life.
Next steps
We encourage all affected firms to review the latest proposals which will be of particular relevance to HR and compliance teams. Senior Managers should also take note of the FCA’s clarified expectations on how they can promote healthy, inclusive workplace cultures where staff feel confident to speak up and raise concerns.
The consultation remains open for comments until 10 September 2025, and Adempi will be submitting a formal response to share our thoughts with the regulator. If you're a client and have feedback or insights that you’d like us to reflect in our submission, please don’t hesitate to get in touch.
Adempi's compliance consultants provide specialist advice and practical support to FCA-regulated firms, including those seeking to create positive culture in their businesses, or to navigate conduct issues when they arise.
If you’d like to speak to one of the team about preparing for the Conduct Rules change, navigating Regulatory References or anything else, you can reach us at contact@adempi.co.uk or on 0203 925 4761.
If you're thinking about training staff, you may want to take a look at our new Bullying and Harassment eLearning module or talk to us about in-house training. To find out more, check out our eLearning page or contact the team at eLearning@adempi.co.uk.
