The Conduct Rules set minimum standards of individual behaviour in financial services. See how they apply to your firm.
On this page 
- Individual Conduct rules
- Consumer Duty – new conduct rule
- Training
- Reporting of breaches
Individual Conduct rules
- You must act with integrity
- You must act with due skill, care and diligence
- You must be open and cooperative with theFCA, thePRAand other regulators.
- You must pay due regard to the interests ofcustomersand treat them fairly.
- You must observe proper standards of market conduct
SMFs have four additional conduct rules.
Further information about the Conduct Rules, including what activities they apply to and indicative examples of the type of behaviour that could breach each rule, is contained in the Code of Conduct sourcebook (COCON)in the FCA Handbook.
Consumer Duty – new conduct rule
In July 2023, the Consumer Duty comes into force. This sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first. The Duty includes a sixth individual Conduct Rule requiring all Conduct Rules staff to ‘act to deliver good outcomes for retail customers’ where the activities of the firm fall within the scope of the Duty.
Read more details on the new Consumer duty.
Training
It is important that Conduct Rules staff receive training that is relevant to their role to understand what the Conduct Rules mean for them. The following examples set out our expectations of firms.
Conduct Rules | |
|---|---|
Positive indicators | Negative indicators |
Relevant SMF can demonstrate appropriate involvement in/oversight of training. | Relevant SMF has limited knowledge of training approach and/or has delegated with limited oversight. |
Training is interactive and uses realistic scenarios. | Simple computer-based training only – with little attempt to tailor to role. |
Examples/scenarios draw out nuances of how the rules apply to each type of role. | Training only gives obvious examples of breaches – for example, fraud or not attending mandatory training - which do not draw out nuances. |
Line managers are involved in training delivery, not just HR or a project team. | Training is delivered by a HR, compliance or the a project team with no line management involvement. |
Training is reinforced regularly and built into on-boarding. | Training is a one-off exercise and/or not built into on-boarding. |
Effectiveness of Conduct Rules training is assessed. | No measures of the effectiveness of Conduct Rules training. |
Training is put in the context of the overall regime. | Training is not put in context of the overall regime. |
Regime/Conduct Rules are presented as a step change in regulatory expectations. | Regime/Conduct Rules are presented as nothing new, simply ‘what we do already’. |
Conduct is linked to F&P and performance assessments. | Conduct not linked to F&P or performance assessments. |
For more information, read section 11 of theSM&CR Guide for solo-regulated firms(PDF).
Reporting of breaches
For non-SMF staff subject to the Conduct Rules, firms must annually report the number of Conduct Rule breaches resulting in disciplinary action using form REP008 in RegData. If there are no breaches a nil return must be submitted.
For SMFs, we require that firms notify us within 7 business days of concluding disciplinary action for a Conduct using a Form D (or Form C if the SMF will be leaving the firm) on Connect.
Disciplinary action means the issuing of a formal written warning, suspension or dismissal, or the reduction or recovery of remuneration. A breach of the Conduct Rules that is not significant enough to warrant one of these outcomes should not be reported.
If a firm takes disciplinary action for a Conduct Rule breach but the employee appeals, or plans to appeal, this should still be reported to us and the notification should include the appeal. The firm should update us on the outcome of an appeal in the next REP008 submission or using Form D (for an SMF).
Dual-regulated firms should also ensure they are aware of the PRA’s requirements in their Rulebook around Conduct Rule breaches and when they need to be reported to them.
On this page
- Individual Conduct rules
- Consumer Duty – new conduct rule
- Training
- Reporting of breaches
