The Financial Conduct Authority (FCA) has recently taken steps to tackle sexual harassment in the workplaces which it regulates. In a letter to Maria Miller MP and Chair of the House of Commons Women and Equalities Committee, published on 16 October 2018, the FCA states that it views sexual harassment as misconduct which falls within its regulatory scope.

Under its Senior Managers and Certification Regime (SMCR) the FCA assesses whether a person is "fit and proper" to hold a senior management post. When making this assessment, the FCA will consider not only the individual's financial conduct but also their non-financial behaviour, including any harassment and sexual misconduct. In its letter the FCA alludes to instances where individuals have not been able to take up or continue in a role because the FCA did not deem them to be "fit and proper" based on non-financial behaviour.

With firms having to carry out their own assessments of fitness and propriety under the SMCR, there will be a greater focus on matters that would have previously fallen under HR's remit.  Under the new regime, it seems more likely that the FCA will seek to link poor culture with poor outcomes for customers so it's important that firms focus on the culture of their own organisations when implementing the new regime.   

The SMCR currently applies to all banks, building societies and credit unions. It is due to be rolled out to insurers from December 2018 and to all other firms authorised under the Financial Services and Markets Act (FSMA) 2000 from December 2019.