{"id":1289,"date":"2024-11-08T14:27:35","date_gmt":"2024-11-08T14:27:35","guid":{"rendered":"https:\/\/iqeq.com\/gb\/insights\/the-fcas-non-financial-misconduct-survey-results\/"},"modified":"2024-11-08T14:28:02","modified_gmt":"2024-11-08T14:28:02","slug":"the-fcas-non-financial-misconduct-survey-results","status":"publish","type":"post","link":"https:\/\/iqeq.com\/gb\/insights\/the-fcas-non-financial-misconduct-survey-results\/","title":{"rendered":"The FCA\u2019s non-financial misconduct survey results"},"content":{"rendered":"
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By Feeras Juenda, Compliance Consulting Analyst<\/em><\/p>\n

On 25 October 2024, the UK Financial Conduct Authority (FCA) published the findings of its culture and non-financial misconduct survey.<\/strong><\/p>\n

In order to ascertain how firms were detecting and managing non-financial misconduct (NFM) failures, such as bullying and harassment, in February 2024 the FCA sent a \u2018notice to provide information\u2019 letter<\/a> to 1,028 regulated wholesale financial services firms to gather data on reported incidents, exercising its power under Section 165 of the Financial Services and Markets Act 2000 (FSMA). This came following the publication of Consultation Paper CP23\/20<\/a> in September 2023 on diversity and inclusion, wherein the FCA stated that the proposed rules and guidance concerning NFM would apply to all firms with a Part 4A permission under the FSMA, including MiFID investment firms and AIFMs.<\/p>\n

The following statement in the FCA\u2019s press release<\/a> by its Executive Director of Markets and International, Sarah Pritchard, highlights the FCA\u2019s objective of maintaining high standards of conduct across the UK financial services industry and the rationale behind the regulator\u2019s continued focus on this area:<\/p>\n

\u201cHealthy workplace cultures are essential across all the markets we regulate \u2013 where non-financial misconduct is allowed to persist it can undermine trust and confidence, and create a culture where wrongdoing goes unchallenged, causing harm.\u201d<\/p><\/blockquote>\n

\u00a0<\/strong><\/p>\n

The FCA\u2019s findings<\/h2>\n

From the survey responses, the FCA found that there had been a significant increase in the number of reported NFM incidents in recent years (an increase of 40% between 2021 and 2023). The most commonly reported (41%) type of NFM across all sectors was \u201cother\u201d NFM, which comprised of issues such as intoxication, inappropriate or offensive language, as well as data protection and information technology security breaches. This was followed by bullying and harassment, as well as discrimination, which constituted 26% and 23% of all reported incidents respectively.<\/p>\n

However, firms took disciplinary or \u201cother\u201d actions in merely 43% of cases. The survey responses also revealed that disciplinary or \u201cother\u201d actions were more likely to be taken in certain types of reported NFM incidents, such as violence and intimidation or sexual harassment. In addition, certain types of NFM were more likely to result in dismissal, such as possession or use of illegal drugs, sexual harassment, and violence or intimidation. It is worth noting that, under Section 1 of the Worker Protection (Amendment of Equality Act 2010) Act 2023, which came into effect on 26 October 2024, employers are now legally obligated to \u201ctake reasonable steps to prevent sexual harassment of employees\u201d.<\/p>\n

Next steps<\/h2>\n

In terms of next steps, the FCA will:<\/p>\n