Make sure your firm knows the new rules and guidance to help tackle non-financial misconduct (NFM).

The changes bring non-financial misconduct firmly within the regulatory framework for firms and individuals subject to the Senior Managers and Certification Regime (SM&CR), including hedge funds, private equity managers, asset managers and other non-bank financial firms.

So, what does this mean?

The new guidance provides greater clarity on a number of areas, including:

• Fitness and propriety assessments – relevant misconduct should be taken into account, including conduct outside the workplace where appropriate.

• Social media and private life – the FCA have provided further guidance on when these issues may be relevant and where the boundaries sit.

• Managers’ responsibilities – managers need to understand the reasonable steps they are expected to take when concerns are raised.

• Unproven allegations – firms need to ensure these are handled carefully and fairly.

Importantly, firms are not expected to revisit every historic conduct decision, repeat previous fit and proper assessments or monitor employees’ private lives.

Instead, the focus is on making sure firms have the right approach in place going forward. That means reviewing whether policies, reporting processes, regulatory references and fit and proper frameworks are clear, effective and fit for purpose.

For regulated firms, this is another reminder that culture and accountability remain firmly on the FCA’s agenda.

At Acuity Law, we work closely with businesses to provide practical, commercially focused advice on regulatory change. If you’re reviewing your approach to NFM, get in touch to discuss what the new rules mean for your business and how we can support you.