Clifford Chance
Non-financial misconduct in financial services regulation –where do we stand?
7 February 2024
In this updated briefing, we consider the current approach of the Financial Conduct Authority (“FCA”) to non-financial misconduct to date, the scope of its authority to take action, the potential impact of its recent proposals, and the ongoing regulatory survey regarding non-financial misconduct.
In recent years, the FCA has emphasised that non-financial misconduct falls within its regulatory remit and has prohibited several individuals convicted of serious offences from working in financial services. However, the absence of explicit regulatory guidance, as well as some apparent inconsistencies in regulatory decisions have led to some uncertainty as to the scope of the FCA’s authority.
Current developments – from the FCA's consultation paper to the "Sexism in the City" inquiry – are set to add further clarity around practical steps firms can take, but grey areas remain. Given the FCA is also now rolling out its survey across the sector seeking data on how non-financial misconduct is handled in practice, firms will want to ensure they have the right governance steps in place for responding in light of wider developments.
