FCA Non-Financial Misconduct: Final Guidance for Private Fund Managers, Fintechs, and Other Non-Banks

In a previous Goodwin alert, “FCA Non-Financial Misconduct Rules: Private Fund Managers, Fintechs, and Other Non-Banks Firmly in Scope” (July 2025), we discussed the consultation paper issued by the UK Financial Conduct Authority (FCA), which contains its final changes to the rules in the Code of Conduct (COCON) and a policy statement on guidance in the COCON and the rules for staff fitness and propriety assessments (FIT), hereafter referred to as the Amended Rules.

The consultation paper and policy statement followed FCA proposals for all FCA-authorised firms, not only banks, to better integrate non-financial misconduct (NFM) considerations into their senior managers and certification regimes.

The FCA has now published its final guidance, “Policy Statement 25/23: Tackling non-financial misconduct in financial services” (the Final Guidance). The Final Guidance will come into force the same day as the Amended Rules: 1 September 2026.

New Final Guidance

The Final Guidance is designed to help determine whether specific types of a person’s behaviour amount to NFM. The guidance also helps determine whether that behaviour amounts to a breach of the COCON and has a bearing on the person’s fitness and properness under FIT.

The changes in the Final Guidance from the consultation paper’s draft guidance include:

• “Clearer alignment with employment law”
• Clarification that a manager’s “accountability is relative to their knowledge and authority”
• “Withdrawing or amending examples and factors that risked imposing disproportionate burdens”
• Clarification “that firms are not expected to investigate trivial or implausible allegations or breach privacy law when assessing fitness and propriety”

The Final Guidance affirms the general position that a person’s conduct in their private life is outside the scope of the COCON. It qualifies this by saying that conduct in the private or personal life of a member of staff that demonstrates a material risk that the person will breach the standards and requirements of the regulatory system may show that the member of the staff being assessed under FIT is not fit and proper. The Final Guidance identifies dishonesty, a lack of integrity, violence, and sexual misconduct as examples of conduct that would indicate that a person is not fit and proper, even if that conduct occurred in the person’s private life.

Comment

As we noted in our previous NFM alerts, NFM remains a key priority for the FCA in the context of its ongoing focus on firm culture, and if the general law is to address NFM issues, then FCA rules should be limited to those necessary to supplement and enforce the general law and go no further (i.e., be proportionate). The Final Guidance helps bring legal certainty in an often contested area and should help satisfy that proportionality requirement and reinforce an approach under which the Amended Rules can be interpreted in a manner that is consistent with the general law. The cost of legal certainty was always going to be additional detail, and the Final Guidance has retained the detail set out in the consultation paper. Ultimately, the burden may not be that great for less complex firms, such as private fund managers and fintechs. However, they will need to read and assess the Final Guidance to determine if that is indeed the case.

Please reach out to your Goodwin contact or any of this alert’s authors should you want to discuss the matters raised in this briefing.