In December 2025, the Financial Conduct Authority (FCA) unveiled new guidance for Financial Services employers through Policy Statement PS25/23. Traditionally, the focus on misconduct has centred around financial crimes and technical violations. However, this updated guidance emphasises the importance of actively preventing and addressing non-financial misconduct (NFM) to uphold regulatory compliance and integrity within the industry.
What Has the FCA Updated in PS25/23?
The FCA’s new policy guidance, PS25/23, published in December 2025, will extend its conduct rules (COCON) to explicitly include serious non-financial misconduct (NFM) such as bullying, harassment, violence and similar behaviour. This change will take effect on September 1, 2026, and will apply to all regulated firms.
It broadens the “fit and proper” test to include such behaviour and now applies to non-bank firms, creating greater accountability for workplace culture.
Key Implications of the FCA Policy Guidance:
- Extension of Conduct Rules (COCON): The scope of COCON will now apply to all firms under the Senior Managers and Certification Regime (SMCR). This means that misconduct, even if it occurs outside of working hours or in private, may be a regulatory concern if it impacts workplace safety.
- Definition of Non-Financial Misconduct (NFM): The guidance clarifies that NFM includes behaviours such as sexual harassment, bullying, and violent conduct towards colleagues.
- Fit and Proper Test (FIT): NFM will be formally considered in the assessment of whether an individual is fit and proper to hold a position in financial services, potentially affecting their regulatory reference.
- Management Responsibility: Senior individuals are required to take reasonable steps to prevent NFM, and firms must implement appropriate systems and controls to address these issues. Failure to do so may result in sanctions.
The main aim of the policy is to foster better, safer, and more inclusive workplace cultures within the financial sector.
The Role of Social Media in Fitness and Propriety Assessments
While firms are not required to proactively monitor employees’ social media accounts, the FCA has clarified that “an individual’s social media activity in their private life may be relevant to their fitness and propriety if it indicates a material risk of breaching regulatory standards and requirements. Examples of such risks include threats of violence, involvement in criminal activities, or behaviour that suggests a likelihood of bullying or harassment at work.”
Firms should clearly communicate how employees’ conduct in their personal lives may impact their fitness and propriety and establish clear criteria for making these assessments. It may be necessary to review social media policies to mitigate misconduct risks and ensure employees understand the potential employment-related consequences of their private social media use.
With the September 2026 deadline approaching, firms should consider reviewing their vetting processes. Relying on manual “Googling” may be inadequate and prone to bias.
Social media screening may help mitigate the risks:
- Identifying potential risk Behaviours: Flagging specific instances of violence and criminal activity that the FCA explicitly identifies as risks to “Fitness and Propriety.”
- Ensuring Consistency: Providing a standardised, objective audit trail, demonstrating that your firm is taking proactive steps to uphold the new COCON standards.
Practical Steps Firms Should Take Before September 2026
Firms should review their existing social media policies to ensure alignment with the new guidance. It is essential to involve senior management in discussions about the implications of this guidance and the importance of fostering a culture of compliance and accountability.
As a leading provider of background screening solutions, First Advantage is well equipped to support firms in mitigating risk through Social Media Background Checks. Our services may support your compliance program and, based on the checks you select, provide additional insights about candidates.
By partnering with First Advantage, employers can effectively manage their hiring practices, mitigate risks, and address their compliance requirements in this evolving regulatory landscape.
Take the next step—speak to our experts today to assess your current screening strategy and discover how First Advantage can help you eliminate uncertainty, protect revenue, ensure compliance, and deliver measurable ROI.
