The House of Commons Treasury Committee has published a letter from the FCA dated 16 October 2025 providing an update on its response to the recommendations outlined in the Committee’s March 2024 report on “Sexism in the City”. The letter updates on the FCA's approach to non-financial misconduct (NFM) and its efforts to improve data collection on non-disclosure agreements (NDAs).

Non-financial misconduct update

Notably, the FCA’s letter confirms that it intends to finalise by the end of this year whether it will issue additional guidance to help firms interpret its NFM rules. This follows Consultation Paper CP25/18, published in July 2025 and closed in September 2025, which sought views on draft Handbook guidance to assist firms in applying the Code of Conduct (COCON) and the Fit and Proper Test for Employees and Senior Personnel (FIT) in relation to serious forms of NFM, such as bullying, harassment, and violence. Importantly, the responses from industry bodies to the Treasury Committee that were published alongside the FCA’s letter indicated broad support for additional guidance. Based on this feedback, it appears highly likely that the FCA will publish updated Handbook guidance before the end of the year.

However the FCA decides to proceed regarding the additional guidance, it is clear that NFM is already a regulatory issue for all firms — even before the extension of the rules incorporating NFM into COCON, FIT, and breach notifications comes into force on 1 September 2026. The FCA's letter states:

We will continue to act on any issues relating to non-financial misconduct that are reported to us and continue to engage with firms on this topic.

The FCA’s letter confirms that it continues to prioritise supervisory oversight of NFM, with 76 open cases currently under review. These span a range of portfolios, with the highest concentration in Wholesale Sell-Side & Infrastructure (18 cases), followed by Insurance (15), Consumer Investments (11), and Retail Banking (11). The FCA notes that this distribution reflects its targeted focus on wholesale markets to date.

More generally, supervisory activity in relation to NFM has increased year-on-year, with 123 cases opened in 2022, rising to 168 in 2023, and 229 in 2024. As of 9 October 2025, 176 cases were already open this year. Note, however, that the FCA cautions that these figures may understate the full scope of its work, as some cases involve multiple reports or overlapping issues.

Non-disclosure agreements update

The FCA’s letter also sets-out data on the use of NDAs in relation to incidents involving allegations of NFM. This follows the FCA’s February 2024 targeted survey of over 1,000 wholesale firms – including banks, insurers, brokers, and intermediaries – to better understand how incidents of NFM were detected and resolved between 2021 and 2023. As part of this, firms were asked to report the number of confidentiality and settlement agreements signed by complainants in connection with NFM cases. In wholesale banks, the number of such agreements declined over the period – from 87 in 2021 to 51 in 2023 – while figures in other sectors remained relatively static.

Although the FCA does not plan to collect this data regularly, it published the findings earlier this year to support benchmarking and encourage firms to review the effectiveness of their reporting and investigation processes. The full survey results and analysis are available in the FCA’s Press Statement.

Final thoughts

We will continue to monitor developments closely as the FCA finalises its position on additional guidance for interpreting NFM rules, expected by the end of 2025.  In the meantime, we recommend that all firms proactively review their internal policies, reporting mechanisms, and cultural frameworks to ensure they are aligned with the FCA’s expectations on NFM. This will help firms prepare for the forthcoming regulatory changes, including the extension of the rules on conduct, fitness and propriety, and breach notifications, which come into force on 1 September 2026.