FCA to expand rules on bullying and harassment in Britain’s financial sector
In September, the UK Financial Conduct Authority (FCA) will extend requirements to report serious cases of non-financial misconduct to a wider range of investment firms and brokers. The new rules will apply to nearly 40,000 companies covered by the senior managers and certification regime. The Guardian reports.
Reporting to the regulator and employers
Companies must inform the FCA about serious cases of non-financial misconduct. These include racism, sexual harassment, violence and bullying. They must also provide information about a manager’s inappropriate conduct to their potential future employer.
The regulator hopes these requirements will prevent executives facing serious allegations from moving to other financial companies without consequences. Until now, the FCA’s enhanced oversight of non-financial misconduct has focused mainly on the banking sector.
Companies’ preparations
According to experts, hedge funds, investment managers, insurers and brokers are updating internal policies, providing staff training and seeking to complete ongoing internal investigations before the new rules take effect. Jill Lorimer, a partner at the law firm Kingsley Napley, said regulated companies should be ready for the changes in September.
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The expansion of the rules comes amid objections from some financial companies and politicians, who believe that regulatory requirements restrain investment, employment and economic growth in the UK. The FCA said that inaction on bullying, harassment or violence calls a company’s culture into question and damages trust in financial services.
Cases mentioned in the report
Lloyd’s of London previously said that its former chief executive, John Neal, had failed to disclose information about a “close relationship” with an employee. The insurance market operator also said it had improperly handled whistleblower reports received since 2023, contrary to its own corporate governance rules.
Hedge fund manager Crispin Odey is challenging a ban on holding senior positions in the UK financial sector. The FCA said that he deliberately obstructed an investigation into allegations of sexual harassment at his hedge fund. Odey denies these allegations and also claims that he did not seek to obstruct the investigation and that the FCA treated him unfairly.
