FCA Expands Misconduct Reporting Rules to 40,000 Firms

The Financial Conduct Authority will expand its crackdown on non-financial misconduct to nearly 40,000 investment firms, brokers, insurers, and pension funds beginning in September. The new regulations mandate that companies report serious instances of racism, violence, intimidation, bullying, and harassment to the regulator.

To prevent individuals from moving between firms to escape consequences, the rules require companies to disclose reports of such behavior to a manager's prospective future employer. These requirements apply to any organization operating under the regulator's senior managers and certification regime.

The expansion follows several high-profile misconduct cases, including those involving former Barclays CEO Jes Staley, hedge fund manager Crispin Odey, and Lloyd's of London. While some firms and politicians argue the measures increase red tape, the regulator maintains that unchallenged misconduct harms confidence in financial services.