Sexism in the City: FCA response and next steps

Sexism in the City: FCA response and next steps

The Financial Conduct Authority (FCA) has outlined its latest steps to address non-financial misconduct and workplace culture in financial services. We summarise the FCA’s progress and what firms should be doing now to prepare for closer regulatory scrutiny.

In September this year, the House of Commons Treasury Committee (the Committee) asked the FCA to provide an update on its response to the Committee’s Sexism in the City inquiry report (available here). The 2023 inquiry examined sexual harassment, gender inequality and misogyny in financial services, and called on the FCA to take stronger action on workplace culture and accountability.

The FCA has now responded, outlining the steps already taken and the further work planned to address misconduct and “cultural failings” in the sector.

FCA widens scope of misconduct rules

• The FCA has extended its non-financial misconduct framework to cover non-bank firms, creating consistent standards across the sector.
• Firms must now assess behaviour such as bullying, harassment and violence when deciding whether individuals are fit and proper to work in financial services.
• The FCA plans to decide by the end of 2025 whether to issue further guidance following consultation feedback.

The change signals the FCA’s intention to embed behavioural expectations into fitness and propriety assessments across all regulated firms. Employers should ensure their internal conduct policies reflect this wider scope.

Working with the EHRC to enforce the duty to prevent sexual harassment

• The FCA continues to work with the Equality and Human Rights Commission (EHRC) to support enforcement of the new duty to take reasonable steps to prevent sexual harassment in the workplace.
• In March 2025, the FCA and EHRC delivered joint training to FCA staff on non-financial misconduct and employer duties.

Closer alignment between the FCA and EHRC increases the likelihood of coordinated scrutiny of workplace culture and harassment prevention.

Strengthening whistleblowing procedures

• The FCA has redesigned its website to simplify reporting and emphasised that confidentiality or non-disclosure agreements (NDAs) do not stop whistleblowers from speaking up.
• Whistleblowing reports increased in 2024-25 and the FCA has pledged to provide more feedback to reporters and build trust in its processes.
• The FCA continues to partner with the charity Protect to promote a “speak up” culture.

Firms should review their whistleblowing frameworks to ensure they are accessible, clearly communicated and demonstrate active follow-up.

Scrutinising confidentiality agreements

• In 2024, the FCA surveyed more than 1,000 regulated firms on their use of confidentiality agreements in connection with non-financial misconduct incidents.
• While reports of these incidents increased between 2021 and 2023, the number of confidentiality or settlement agreements fell from 87 to 51, a fall of more than 40%.

The FCA is signalling closer oversight of NDAs in misconduct cases. Firms need to be prepared to justify when and how they use confidentiality clauses.

Supervisory action on cultural outliers

• The FCA followed up with firms identified as outliers in its survey on culture and non-financial misconduct.
• It reports improvements in management information and reporting on non-financial misconduct, staff training and employee handbooks.
• It has also liaised with industry associations and standard-setting bodies to promote best practices for tackling non-financial misconduct.
• As of October 2025, the FCA was handling 76 open supervisory cases regarding
  non-financial misconduct.

Firms should expect the FCA to continue assessing how effectively they monitor, report and act on cultural issues.

Monitoring the removal of the bankers’ bonus cap

• The FCA has not yet reviewed the impact of removing the bankers’ bonus cap, stating that firms need time to adjust.
• It plans to decide in 2026 whether to carry out a full review and will update its position in its 2026-27 workplan.
• The FCA is working with the Prudential Regulation Authority, EHRC and the Government Equalities Office to determine next steps.

Looking ahead

The FCA’s response shows steady progress in embedding non-financial misconduct standards and improving workplace culture in financial services. Many initiatives remain at an early stage and their effectiveness will depend on how consistently firms apply them across the sector. With multiple supervisory cases ongoing, firms can expect the FCA to continue testing how culture and conduct controls operate in practice.

In the meantime, firms should review their conduct and whistleblowing frameworks to ensure they demonstrate proactive management of behavioural risks and alignment with evolving FCA expectations.