Not a bank? The FCA’s bullying rules now apply to you.
For most of the last decade, a bullying complaint at an asset manager, broker or insurer was an HR problem. From 1 September 2026, that changed: serious bullying, harassment and violence between colleagues became a potential breach of the FCA’s Conduct Rules for every firm required to operate under the Senior Managers & Certification Regime, not just banks. Read about how it may apply to you.
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Augmetec
For most of the last decade, a bullying complaint at an asset manager, broker or insurer was an HR problem. It was handled through a grievance policy and rarely reached the compliance team. From 1 September 2026, that changed: serious bullying, harassment and violence between colleagues became a potential breach of the FCA’s Conduct Rules for every firm required to operate under the Senior Managers & Certification Regime, not just banks.
What has actually changed
Until this autumn, the weight was borne predominantly by banks, where the Code of Conduct (COCON) applied to almost everything an employee did at work. In other regulated businesses, it applied only to the firm's regulated financial activities. A senior portfolio manager who bullied a junior colleague might be dismissed, but it was often unclear whether that was a regulatory matter at all.
The FCA has removed that asymmetry. A new rule, COCON 1.1.7FR, extends the Conduct Rules in non-banks to cover serious bullying, harassment and violence towards colleagues where there is a clear link to the person's professional role. The FCA estimates this brings roughly 37,000 non-bank firms, including asset managers, brokers and insurers, onto the same footing as banks. The rule is not retrospective.
Guidance published in December 2025 (Policy Statement PS25/23) covers three things firms need to get right:
The Conduct Rules: when non-financial misconduct crosses the line from poor behaviour into a breach of the requirements to act with integrity and with due skill, care and diligence.
Fitness and propriety: how serious non-financial misconduct, occasionally including conduct outside the workplace, bears on whether someone is fit to hold a regulated role.
Regulatory references: serious, substantiated cases must now follow people when they move firms.
The FCA's definition of bullying and harassment deliberately tracks employment law. In practice, that means HR and compliance are now applying overlapping tests to the same facts, with different consequences hanging on the outcome.
Why this is a business issue, not just a compliance one
There are a number of core points that have shifted.
The case now has several audiences: One internal investigation now gets reused in several regulatory processes, so a shaky finding can cause problems in several places at once. A single finding could trigger a conduct breach assessment, a fitness and propriety review, a regulatory reference, and, in some cases, a notification to the FCA.
HR has to work closer with compliance: In practice, HR now needs to share relevant cases with compliance, and for the firm to record why each case does or doesn’t meet the regulatory threshold.
A finding can end a career: Serious, substantiated findings now generally have to go in a person’s regulatory reference. Accused staff may therefore challenge investigations hard, as this could stop them working in financial services again.
Managers carry personal accountability: Named senior managers must take reasonable steps to prevent bullying and harassment, and deal with it properly when it happens. If a complaint is ignored or badly handled, the FCA can ask whether that manager failed in their own duties.
A policy on paper won’t be enough: The FCA sees tolerated bullying as a sign of wider cultural problems that can also lead to financial misconduct. Supervisors will want to know how real complaints were handled: who investigated, how consistently, and why they reached their conclusions.
What firms should be doing now
Every one of those consequences rests on the quality of the internal investigation. Many firms' existing approach won't hold up: complaints investigated by whoever is available, methods varying case to case, notes in personal folders and decisions recorded in an email, if at all. As a result, five priorities stand out:
Map the complaint journey and who decides what. Trace how an allegation moves from first report to final outcome, and set out how HR, compliance, legal and senior management share triage, investigation, breach assessment and regulatory references. How LEIAA helps: reports come in through one place, cases are triaged and tracked on a single dashboard, and roles and responsibilities are allocated within the workflow.
Standardise the investigation. Use consistent methods, interview approaches and reporting templates, so similar allegations are handled in similar ways and outcomes can't be attacked as arbitrary. How LEIAA helps: teams build a library of repeatable workflows and templates, and historic analysis compares new cases with past outcomes to keep the approach consistent.
Record a reasoned decision and a clear evidential trail. Capture what was alleged, gathered and found, and why the conduct did or didn't breach the Conduct Rules or need to appear in a reference. Store it centrally so it can be retrieved years later. How LEIAA helps: everything from the original report to evidence and witness interviews sits in one secure platform with a full audit trail, and AI answers are cited back to source.
Build in proportionality and fairness. Where private life is involved, act lawfully and stand back where another body is better placed. A process that feels one-sided to the accused will be challenged. How LEIAA helps: access controls limit sensitive material to those with a legitimate need, and suggested witnesses, questions and next steps help ensure every review is thorough.
Resource and train the investigators. Clearer rules usually mean more reports, not fewer. The biggest risk lies with the managers and HR teams now running investigations that carry regulatory weight. How LEIAA helps: automated transcription, summaries and task management help teams handle higher caseloads, cutting administrative work by up to 45%, while best-practice questions from past cases support less experienced investigators.
The bottom line
The FCA has given bullying and harassment cases consequences that reach into a firm's regulatory standing, its senior managers' accountability and the careers of everyone involved. The question firms will face is no longer simply "did you act?" but "can you show us how you reached that conclusion?"
That is exactly the problem Augmetec was built to solve. Our platform LEIAA, designed by investigators for investigators, helps firms answer that question with confidence.
