New FCA Guidance for Non-Financial Misconduct: What Firms Need to Know

The Financial Conduct Authority (FCA) released new guidance for Financial Services employers in December 2025 as part of their Policy Statement PS25/23. In the past, misconduct focused primarily on financial crimes and technical violations. However, this new guidance mandates that employers actively prevent and address non-financial misconduct (NFM) to maintain their regulatory standing.

What the FCA’s New Policy Guidance Means

Policy Statement PS25/23 establishes new regulatory standards for addressing NFM within the UK financial sector. These rules, scheduled to take effect on September 1, 2026, integrate behavioral expectations into the Code of Conduct (COCON) and Fit and Proper (FIT) sourcebooks.

The guidance clarifies how incidents like harassment, discrimination, and serious private-life misconduct impact an individual’s professional standing. While the policy holds managers accountable for fostering safe environments, it also clarifies the boundaries of territorial scope and personal social media use. Ultimately, the framework seeks to build consumer trust and ensure that only individuals who demonstrate integrity and professionalism are permitted to work in the industry.

This new guidance comes at a time when non-financial misconduct in the industry continues to rise. Fama’s recent State of Misconduct at Work research found the Financial Services sector has the second highest non-financial misconduct levels among benchmarked industries. A majority of the misconduct was online harassment, threats, and intolerance. With the lines between online behavior and professional conduct blurring, behavior risks are impacting both individuals as well as their employers. Now, they impact regulatory compliance.

What This Means for Financial Services Employers

The most significant shift is the formal recognition that an individual’s behavior outside the office, specifically online and social media activity, can be a regulatory red flag. As the FCA notes:

"An individual’s social media activity in their private life will be relevant to their fitness and propriety if it indicates a material risk that they will breach regulatory standards and requirements. Examples could include threats of violence, or clear involvement in criminal activities, or conduct that shows a material risk that they will carry out bullying or harassment at work."

For compliance officers and HR leaders, this creates a new burden of proof. You are no longer just checking credit scores and criminal records; you are now tasked with assessing behavioral risk.

How Social Media Screening Keeps You Compliant

With the September 2026 deadline approaching, firms must modernize their vetting processes. Manual "Googling" isn't just inefficient; it’s prone to bias, and because of the sheer volume of content people are posting oftentimes misses the problematic behaviors required by the FCA.

Fama’s AI-powered social media screening is able to screen a person’s public online footprint at scale and in a way that aligns directly with PS25/23 requirements by:

• Identifying High-Risk Behaviors: We flag specific instances of violence, criminal activity, and harassment that the FCA explicitly mentions as risks to "Fitness and Propriety."
• Ensuring Consistency: Our screening provides a standardized, objective audit trail, showing regulators that your firm is taking proactive steps to uphold the new COCON standards.
• Respecting Boundaries: Fama focuses on misconduct, not personal opinions or protected class information, ensuring you stay compliant with both the FCA as well as additional data privacy laws and AI regulations.

The Bottom Line

Under PS25/23, non-financial misconduct is no longer "fluff;" it’s a regulatory requirement. For new hires and annual reviews, screening for these behaviors is essential to maintaining a compliant, global workforce and protecting your firm’s reputation. For more information on how Fama can help you stay FCA compliant, contact Fama today.