Tackling Non- Financial Misconduct in Financial Services


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As the FCA has said,“Non-ﬁnancial misconduct is misconduct, plain and simple”. The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) published separate but closely aligned Diversity & Inclusion (D&I) Consultation Papers (CPs) on 25 September 2023. Following feedback from their earlier D&I Discussion Paper in 2021, and a number of high profile sexual harassment cases, the FCAʼs CP set out lengthy proposed rules and guidance on NFM to be inserted into the FCA Handbook. After several delays, the FCA have said they will set out “next steps” on NFM by the end of June 2025, and separated it from the regulatorsʼ D&I proposals. On 12 March 2025, it was announced that the D&I proposals would not be taken forward, not because the FCA and PRA consider D&I any less important, but because of the potential regulatory burden of their D&I proposals at a time when a number of planned D&I legislative proposals will affect all employers under the Government’s Employment Rights Bill and forthcoming Equality (Race and Disability) Bill. NFM, however, remains firmly on the agenda and firms should be preparing for what lies ahead. Each instalment in our NFM series below covers various developments on NFM, including the FCAʼs initial proposals, the Treasury Committee's “Sexism in the City” Inquiry, the FCA’s survey on NFM in wholesale firms, and the FCA’s final NFM guidance (which is expected later this year). We also set out how we can help firms embed compliance with the new rules. Separately, we have a series on the related D&I proposals here: Direction of travel: Diversity & Inclusion in Financial Services \| UK \| Eversheds Sutherland. The FS regulators’ proposals on this have been dropped, but firms will find a number of useful resources on that page to help them as they seek to implement the Government’s legislative D&I plans Talking Point: Comments on the FCA's next steps on Non-Financial Misconduct After much delay on 2 July the FCA published a short Policy Statement, and a further Consultation Paper (CP25/18) on proposed non-financial misconduct guidance. The latter will only be taken forward with sufficient industry support. The Policy Statement will change Conduct Rules (COCON) from 1 September 2026 and the proposed revised guidance is open for consultation until 10 September 2025. See our LinkedIn post below for comments on the key points. FS regulators drop D&I plans entirely, and announce an update on non-financial misconduct In an update published on 12 March 2025, the FCA and PRA jointly stated they will not be taking forward the D&I proposals in the 2023 Consultation paper in light of the broad range of feedback, expected legislative developments and to avoid additional burdens on firms. At the same time, the FCA announced that it is continuing to prioritise its work on non-financial misconduct, but is taking further time to get its approach right and will set out next steps by the end of June 2025. In our LinkedIn post, Sophie White and Claire Carroll share their thoughts on how this affects FS employers. UK: FCA takes enforcement action against Crispin Odey In this article we look at the FCA’s enforcement action against Crispin Odey, founder of Odey Asset Management LLP, imposing a significant fine and prohibiting him from performing regulated activities in financial services. Whilst the FCA’s case was based on Mr Odey’s lack of integrity in frustrating disciplinary proceedings (breaching Individual Conduct Rule 1), these arose from allegations of NFM including multiple sexual harassment allegations against him. The case highlights the regulatory risks and reputational damage that firms may face if they fail to tackle NFM, and lessons to be learned, whether under the current FCA rules or any future guidance we await on NFM. “Culture is Contagious” – next steps for non-financial misconduct and D&I Our industry specialists comment on a speech given by Emily Shepperd, FCA Chief Operating Officer, on 3 February 2024, where she discussed the importance of culture, psychological safety, and gave the latest update on FS regulators’ plans both for non-financial misconduct, and diversity and inclusion. UK Financial Services: Implications of FCA non-financial misconduct survey findings Following our high level LinkedIn flash update above on the FCAʼs findings in its culture and non-financial misconduct (NFM) survey, our latest instalment in this topic series takes a much deeper look analysing the survey findings, their potential implications (including in light of the closely-linked new employer duty to prevent sexual harassment, and the recently published Employment Rights Bill) and actions firms may want to consider. The FCA is asking firms to benchmark and peer review the survey findings against their own performance and to consider their approach to NFM in detail. This article will be especially relevant as financial services firms anticipate the FCAʼs long-awaited Policy Statement on NFM due early in 2025. FCA publishes findings of non-financial misconduct survey The FCA has now published findings from its survey on incidents of non-financial misconduct, along with how it expects all regulated firms to respond. This flash update considers the high level findings, what firms should do now, along with the new duty (already in force) on all employers to prevent sexual harassment, and proposed related changes in the new Employment Rights Bill. Update on Diversity & Inclusion and non-financial misconduct Consultation Paper proposals The Financial Conduct Authority indicated in May 2024 that it is prioritising non-financial misconduct guidance over the data collection and diversity proposals from its Consultation Paper (the latter will not be taken forward at this stage). This change aligns with the Treasury Committee's recommendations and reflects complexities around the diversity proposals. In the latest instalment of our series, we consider: what is the reason for this apparent change of focus? does this mean the FCA is dropping the data collection and D&I proposals altogether? what could firms expect in the light of the FCA’s comments? "Sexism in the City” Inquiry - report and recommendations This update sets out the key recommendations arising from the “Sexism in the City” Inquiry report, focusing on barriers for women in UK Financial Services and was published on International Womenʼs Day in March 2024. UK Financial Services – FCA surveys wholesale insurers and intermediaries on non-financial misconduct In this article we looked in more detail at the FCA's 2024 survey on non-financial misconduct to wholesale financial services firms, how it expected firms to respond, and how the survey may impact firms' general approach to non-financial misconduct. Non-Financial misconduct – an update In this instalment, we took a look at the FCAʼs plans in February 2024 to gather data on non-financial misconduct and the role of regulatory references in tackling NFM. Diversity and Inclusion in Financial Services (UK): what's next for firms? Watch our webinar recording as we discuss the Financial Conduct Authorityʼs and Prudential Regulation Authorityʼs 2023 Consultation Papers on D&I and non-financial misconduct in financial services. Our speakers discuss in more detail which size and types of firms would be subject to which proposals in the Consultation Papers, the D&I proposals, collecting the prescribed Culture and Inclusion feedback and what you should do now to prepare, and the proposed rules on non-financial misconduct and how they will impact all firms. New published proposals: what do firms need to know? The FCA and PRA in September 2023 published Consultation Papers on improving Diversity and Inclusion in Financial Services. These consultations come off the back of a groundswell of announcements around this area from regulators across sectors, and a growing concern of how to deal with non-financial misconduct in the financial services industry. But what do Financial Service firms need to know? Articles relating more broadly to the Diversity & Inclusion proposals, including resources and articles focusing on specific diversity characteristics, D&I data collection and strategies can be found on our FS D&I landing page here: The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer. 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Welcome to our ‘Broadening regulatory scope: Tackling Non-Financial Misconduct in Financial Services’ series, looking at the UK Financial Services (FS) regulators’ plans (led by the FCA, with input from the PRA) to make non-ﬁnancial misconduct (NFM) part of the regulatory regime for FS ﬁrms and staff. As the FCA has said,“Non-ﬁnancial misconduct is misconduct, plain and simple”.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) published separate but closely aligned Diversity & Inclusion (D&I) Consultation Papers (CPs) on 25 September 2023. Following feedback from their earlier D&I Discussion Paper in 2021, and a number of high profile sexual harassment cases, the FCAʼs CP set out lengthy proposed rules and guidance on NFM to be inserted into the FCA Handbook. After several delays, the FCA have said they will set out “next steps” on NFM by the end of June 2025, and separated it from the regulatorsʼ D&I proposals. On 12 March 2025, it was announced that the D&I proposals would not be taken forward, not because the FCA and PRA consider D&I any less important, but because of the potential regulatory burden of their D&I proposals at a time when a number of planned D&I legislative proposals will affect all employers under the Government’s Employment Rights Bill and forthcoming Equality (Race and Disability) Bill. NFM, however, remains firmly on the agenda and firms should be preparing for what lies ahead.

Each instalment in our NFM series below covers various developments on NFM, including the FCAʼs initial proposals, the Treasury Committee's “Sexism in the City” Inquiry, the FCA’s survey on NFM in wholesale firms, and the FCA’s final NFM guidance (which is expected later this year). We also set out how we can help firms embed compliance with the new rules.

Separately, we have a series on the related D&I proposals here: Direction of travel: Diversity & Inclusion in Financial Services | UK | Eversheds Sutherland. The FS regulators’ proposals on this have been dropped, but firms will find a number of useful resources on that page to help them as they seek to implement the Government’s legislative D&I plans

Talking Point: Comments on the FCA's next steps on Non-Financial Misconduct

After much delay on 2 July the FCA published a short Policy Statement, and a further Consultation Paper (CP25/18) on proposed non-financial misconduct guidance. The latter will only be taken forward with sufficient industry support. The Policy Statement will change Conduct Rules (COCON) from 1 September 2026 and the proposed revised guidance is open for consultation until 10 September 2025. See our LinkedIn post below for comments on the key points.

FS regulators drop D&I plans entirely, and announce an update on non-financial misconduct

In an update published on 12 March 2025, the FCA and PRA jointly stated they will not be taking forward the D&I proposals in the 2023 Consultation paper in light of the broad range of feedback, expected legislative developments and to avoid additional burdens on firms. At the same time, the FCA announced that it is continuing to prioritise its work on non-financial misconduct, but is taking further time to get its approach right and will set out next steps by the end of June 2025. In our LinkedIn post, Sophie White and Claire Carroll share their thoughts on how this affects FS employers.

UK: FCA takes enforcement action against Crispin Odey

In this article we look at the FCA’s enforcement action against Crispin Odey, founder of Odey Asset Management LLP, imposing a significant fine and prohibiting him from performing regulated activities in financial services. Whilst the FCA’s case was based on Mr Odey’s lack of integrity in frustrating disciplinary proceedings (breaching Individual Conduct Rule 1), these arose from allegations of NFM including multiple sexual harassment allegations against him. The case highlights the regulatory risks and reputational damage that firms may face if they fail to tackle NFM, and lessons to be learned, whether under the current FCA rules or any future guidance we await on NFM.

“Culture is Contagious” – next steps for non-financial misconduct and D&I

Our industry specialists comment on a speech given by Emily Shepperd, FCA Chief Operating Officer, on 3 February 2024, where she discussed the importance of culture, psychological safety, and gave the latest update on FS regulators’ plans both for non-financial misconduct, and diversity and inclusion.

UK Financial Services: Implications of FCA non-financial misconduct survey findings

Following our high level LinkedIn flash update above on the FCAʼs findings in its culture and non-financial misconduct (NFM) survey, our latest instalment in this topic series takes a much deeper look analysing the survey findings, their potential implications (including in light of the closely-linked new employer duty to prevent sexual harassment, and the recently published Employment Rights Bill) and actions firms may want to consider.

The FCA is asking firms to benchmark and peer review the survey findings against their own performance and to consider their approach to NFM in detail. This article will be especially relevant as financial services firms anticipate the FCAʼs long-awaited Policy Statement on NFM due early in 2025.

FCA publishes findings of non-financial misconduct survey

The FCA has now published findings from its survey on incidents of non-financial misconduct, along with how it expects all regulated firms to respond. This flash update considers the high level findings, what firms should do now, along with the new duty (already in force) on all employers to prevent sexual harassment, and proposed related changes in the new Employment Rights Bill.

Update on Diversity & Inclusion and non-financial misconduct Consultation Paper proposals

The Financial Conduct Authority indicated in May 2024 that it is prioritising non-financial misconduct guidance over the data collection and diversity proposals from its Consultation Paper (the latter will not be taken forward at this stage). This change aligns with the Treasury Committee's recommendations and reflects complexities around the diversity proposals.

In the latest instalment of our series, we consider:

what is the reason for this apparent change of focus?
does this mean the FCA is dropping the data collection and D&I proposals altogether?
what could firms expect in the light of the FCA’s comments?

"Sexism in the City” Inquiry - report and recommendations

This update sets out the key recommendations arising from the “Sexism in the City” Inquiry report, focusing on barriers for women in UK Financial Services and was published on International Womenʼs Day in March 2024.

UK Financial Services – FCA surveys wholesale insurers and intermediaries on non-financial misconduct

In this article we looked in more detail at the FCA's 2024 survey on non-financial misconduct to wholesale financial services firms, how it expected firms to respond, and how the survey may impact firms' general approach to non-financial misconduct.

Non-Financial misconduct – an update

In this instalment, we took a look at the FCAʼs plans in February 2024 to gather data on non-financial misconduct and the role of regulatory references in tackling NFM.

Diversity and Inclusion in Financial Services (UK): what's next for firms?

Watch our webinar recording as we discuss the Financial Conduct Authorityʼs and Prudential Regulation Authorityʼs 2023 Consultation Papers on D&I and non-financial misconduct in financial services. Our speakers discuss in more detail which size and types of firms would be subject to which proposals in the Consultation Papers, the D&I proposals, collecting the prescribed Culture and Inclusion feedback and what you should do now to prepare, and the proposed rules on non-financial misconduct and how they will impact all firms.

New published proposals: what do firms need to know?

The FCA and PRA in September 2023 published Consultation Papers on improving Diversity and Inclusion in Financial Services. These consultations come off the back of a groundswell of announcements around this area from regulators across sectors, and a growing concern of how to deal with non-financial misconduct in the financial services industry. But what do Financial Service firms need to know?

Articles relating more broadly to the Diversity & Inclusion proposals, including resources and articles focusing on specific diversity characteristics, D&I data collection and strategies can be found on our FS D&I landing page here:

The materials on the Eversheds Sutherland website are for general information purposes only and do not constitute legal advice. While reasonable care is taken to ensure accuracy, the materials may not reflect the most current legal developments. Eversheds Sutherland disclaims liability for actions taken based on the materials. Always consult a qualified lawyer for specific legal matters. To view the full disclaimer, see our Terms and Conditions or Disclaimer section in the footer.