City firms race to prepare for FCA crackdown on bullying and harassment
City investment firms are preparing for new Financial Conduct Authority rules requiring them to disclose serious bullying, harassment and other non-financial misconduct. The measures aim to stop senior staff with histories of misconduct moving between firms without consequences, extending existing banking-sector standards across a far wider part of the financial industry.
From next month, nearly 40,000 hedge funds, insurers, pension firms, investment managers and brokers covered by the senior managers and certification regime will be affected. Firms must report serious allegations, including racism, sexual harassment, violence and intimidation, and share relevant misconduct information with prospective employers; lawyers say many are updating training and attempting to conclude internal investigations before the rules begin. The crackdown follows high-profile cases involving Lloyd’s of London, former Barclays chief executive Jes Staley and hedge fund manager Crispin Odey.
- FCA rules will widen misconduct reporting across City investment firms.
- Nearly 40,000 firms must prepare from next month.
- Measures target executives who move firms after alleged wrongdoing.
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The Financial Conduct Authority is the UK regulator for financial services. It oversees banks and many other firms that handle investments, insurance, pensions and trading, with a role in setting standards for how they are run.
The new rules focus on behaviour at work that may call into question whether someone is suitable for a senior or regulated role. They cover issues such as bullying, harassment, discrimination, violence and intimidation, rather than financial wrongdoing such as fraud or market abuse.
The measures build on the senior managers and certification regime, which makes firms responsible for checking that key staff are fit for their roles. They are intended to make it harder for people accused or found to have committed serious misconduct to move to another financial firm without relevant information being considered.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that making serious non-financial misconduct relevant to regulatory fitness and propriety is essential to protect employees, clients and the integrity of financial markets. They contend that allowing senior figures to move between firms while credible histories of harassment, racism or intimidation remain undisclosed rewards harmful behaviour and leaves victims exposed. Consistent reporting and reference-sharing, in this view, bring accountability to an industry whose culture and power imbalances have too often impeded it.
The case against
Critics may accept the need to tackle genuine misconduct but argue that rules based on allegations and internal investigations risk undermining due process, particularly where facts are disputed or complaints are unresolved. They worry that broad, inconsistent definitions of serious misconduct could encourage defensive reporting, damage reputations and make firms reluctant to hire people with contested histories. A careful framework, they would say, must protect complainants while ensuring confidentiality, proportionality and a meaningful opportunity for accused staff to respond.