The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

The responsibility for interpreting expectations, making judgement calls and embedding them into day‑to‑day decision‑making sits firmly with firms themselves. That shift has real implications for culture, governance, and credibility across financial services.

At first glance, the updated framework may appear to narrow the scope of regulatory intervention. Under the Conduct Rules (COCON), private life is generally excluded, minor workplace behaviour is carved out, and there is no single seriousness threshold. In practice, however, the absence of bright lines raises the stakes. Firms are expected to balance purpose and effect, weigh multiple seriousness factors, and explain their reasoning – often in complex, contested situations where evidence is incomplete, and perspectives diverge.

Judgement, not checklists

A central challenge is seriousness. The guidance confirms that factors such as repetition, duration, impact, seniority, power imbalance and prior warnings all matter, but it deliberately avoids prescribing how much weight each factor should carry. That is not an oversight. It reflects an expectation that firms are best placed to make judgement calls on these issues.

Over‑reliance on rigid matrices or tick‑box assessments risks missing the point. The same applies to the two‑part test of purpose and effect. Conduct may breach the rules because of its intended purpose, even if it never reaches the intended recipient. Equally, behaviour without malicious intent may still cross the line if its effect is reasonably perceived as intimidating or degrading. These are nuanced calls, and firms need decision‑makers who are trained, confident and supported to make them.

Audit trails, quality assurance and scenario testing are no longer “nice to have”; they are essential safeguards.

Managers and culture in the spotlight

The guidance also sharpens the focus on managers. Failing to take reasonable steps to prevent misconduct, dismissing concerns, or tolerating poor behaviour can itself amount to a breach. At the same time, responsibility is not unlimited. Knowledge, authority, and context all matter.

With no definition of a ‘manager’, it is essential for firms to form their own view and map out who is captured and what is reasonably expected of them in practice. Culture and governance intersect here. Firms that cannot demonstrate a safe environment for raising concerns or a consistent approach to handling them will struggle to defend their decisions. 

Why fitness and propriety widens the lens

Even where conduct falls outside COCON, it may still be relevant to fitness and propriety (FIT). FIT assessments are broader by design, capturing private or personal conduct where it presents a material, not speculative, risk to regulatory standards or public confidence. Dishonesty, for example, is always relevant, wherever it occurs.

Importantly, there is no duty to proactively monitor private lives or social media. But once firms are made aware of credible concerns, they are expected to consider them proportionately. Ignoring the issue altogether is rarely the right answer.

From compliance to credibility

The common thread running through the guidance is trust: trust in firms to make balanced decisions, and trust in the regulator to scrutinise those decisions. Treating non‑financial misconduct as a narrow compliance exercise risks falling short. Firms that invest now are more likely to navigate grey areas with confidence.  As the guidance comes into force in September 2026, the real question is not whether firms have policies in place, but whether those policies work in practice. Leadership, not just adherence, will define the next phase of regulatory expectations.

The FCA’s final guidance can be found here: PS25/23: Tackling non-financial misconduct in financial services | FCA