The Financial Conduct Authority (FCA) said these rules would be extended to 37,000 regulated financial services firms, as it was previously unclear if such behaviour breached misconduct outside of the banking sector.
The regulator said extending the application of the rules would increase consistency across financial services and deepen trust in the sector.
Further, serious, substantiated cases of poor personal behaviour will need to be shared through regulatory references in the same way financial misconduct is, so it is harder for people to avoid consequences by moving to a different firm.
The FCA said that where it saw poor market conduct or consumer failure, there was often cultural failure within firms too.
The rule change will apply from 1 September 2026.
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The regulator is also asking whether further guidance would be helpful and proportionate for firms as the rule change is introduced.
Its draft guidance discusses how firms should approach non-financial misconduct when determining if someone is fit and proper to work in financial services, including the use of social behaviour and the relevance of behaviour in private and personal life.
The consultation is open until 10 September, and the FCA will proceed with this guidance if there is clear support for it, it said.
Sarah Pritchard, the FCA’s deputy chief executive, said: “Too often, when we see problems in the market, there are cultural failings in firms. Behaviour like bullying or harassment going unchallenged is one of the reddest flags – a culture where this occurs can raise questions about a firm’s decision-making and risk management.
“Our new rules will help drive consistency across industry and support the vast majority of firms that want to do the right thing to deepen trust in financial services.”
