UK Financial Firms Face 2 Reform Deadlines as FCA Misconduct Rules Start Sept. 1
Updated
Updated · The National Law Review · Jul 6
UK Financial Firms Face 2 Reform Deadlines as FCA Misconduct Rules Start Sept. 1
2 articles · Updated · The National Law Review · Jul 6
Summary
Sept. 1, 2026 marks the first key deadline: FCA non-financial misconduct guidance and a new anti-harassment rule take effect, pushing firms to run gap analyses across policies, training, governance and escalation procedures.
Jan. 1, 2027 brings the biggest employment-law hit under ERA 2025, cutting unfair-dismissal eligibility from two years to six months and removing the £123,543 compensation cap, sharply raising exposure for high-paid staff disputes.
October 2026 adds a tougher harassment duty, requiring "all reasonable steps" to prevent sexual harassment, including by third parties, in client meetings, conferences, social events and other work-related settings.
ERA 2025 also tightens whistleblowing and contract-change rules: sexual-harassment complaints already qualify for whistleblowing protection, while fire-and-rehire restrictions and narrower NDA enforceability are due in 2027.
Together, the phased changes force HR, legal and compliance teams to coordinate decisions on misconduct, fitness and propriety, regulatory references and contractual flexibility rather than treat employment and conduct issues separately.
With unfair dismissal compensation now uncapped, are UK finance firms facing a new era of multi-million-pound payouts?
Can new FCA rules truly fix toxic workplace culture, or will it just create another compliance headache for firms?
How will managers be held accountable for preventing employee misconduct that happens outside of the workplace?
Navigating the FCA’s 2026 Non-Financial Misconduct Rules: Compliance, Enforcement, and Global Implications
Overview
From 1 September 2026, the Financial Conduct Authority (FCA) will introduce new Non-Financial Misconduct (NFM) rules, marking a major change in how workplace issues like bullying, harassment, and violence are handled in the financial sector. These rules expand the FCA’s reach to all authorised firms, not just banks, and treat NFM as a serious regulatory concern rather than just an internal HR matter. By embedding NFM within the regulatory perimeter, the FCA aims to protect firm culture and integrity, requiring higher standards through an expanded Code of Conduct and Fit and Proper test.