The FCA has finalised new rules amending the scope of COCON to extend the existing non-financial misconduct (NFM) rules for banks to non-banks. Currently, COCON applies primarily, in respect of non-banks, to conduct forming part of the firm’s SMCR financial activities.
The FCA is also consulting on additional guidance in COCON and FIT. The draft guidance contains:
- detail on the scope of COCON, including:
- the boundary between work and private life;
- when conduct is outside of a firm’s SMCR financial activities; and
- when NFM may be out of scope in a non-bank;
- factors to consider when determining whether NFM breaches the conduct rules;
- examples of reasonable steps for managers to protect staff; and
- explanatory material on how various types of conduct, including NFM, are relevant to FIT.
The consultation closes on 10 September 2025 and the made new rules amending the scope of COCON take effect from 1 September 2026, both in line with the conduct breach reporting period and to allow the FCA time to finalise any guidance it might want to make. The changes to COCON will not apply retrospectively, so will not require firms to do any retrospective analysis of whether they have incorrectly determined a rule breach in the past. The FCA notes in its feedback that if non-banks had not appreciated the restricted scope of COCON and have disciplined an employee for conduct that they thought was a COCON rule breach, they should both update their past breach notifications and ensure they do not include any such breach in Question F of the regulatory reference form – although it may still be relevant under Question G.
The FCA has chosen not to take forward guidance on the relevance of NFM and discriminatory practices in firms to its assessment of their suitability to undertake regulatory activities (in COND), and guidance to remind firms that they may need to disclose NFM at work or in private life in a regulatory reference (in SYSC) – it believes its existing guidance on this point is sufficient.