FCA and PRA eye stricter rules for non-financial misconduct
'This guidance will help ensure firms can take decisive and appropriate action against employees for [non-financial misconduct].'
As part of their work on diversity and inclusion in financial services, the regulators have proposed the introduction of further rules and guidance to highlight that non-financial misconduct — which will include bullying and sexual harassment — «poses a risk to healthy firm culture».
FCA criticised over 'unhelpful' approach to non-financial misconduct cases
«This guidance will help ensure firms can take decisive and appropriate action against employees for such behaviour,» they explained.
Under the proposals, non-financial misconduct will be treated as ‘misconduct' rather than have a separate principle, the regulators said. It will also become part of the ‘fit and proper' test.
This will mean that, if professionals are found to have committed serious non-financial misconduct inside or outside of the workplace — such as sexual or racially motivated offences — they will no longer be deemed fit and proper to work in financial services.
In such instances, the regulators could impose a partial or full prohibition, «depending on the level and type of risk posed by the individual in question».
Misconduct that could damage public confidence in financial services would also result in a lack of fitness and propriety, the FCA and PRA explained.
The consultation paper also set out proposals to boost diversity and inclusion, as well as reduce groupthink and unlock talent in the industry.
The diversity standards will be «flexible» and «proportionate», the FCA and PRA said, with greater requirements placed on larger companies.
These will include: the development of a D&I strategy setting out how companies
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