Category: Compliance & AML · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed June 2026
The five high-level rules of conduct that apply to almost every employee of an FCA-regulated firm and provide an enforceable standard of personal behaviour.
The tier 1 Conduct Rules are five short rules of personal conduct that apply to most employees of an FCA-authorised firm carrying out a function within or relating to regulated activities. They set a personal standard against which individual misconduct can be assessed and enforced by the FCA.
FSMA section 64A (rules of conduct), supported by COCON (Code of Conduct sourcebook) in the FCA Handbook. Section 66 of FSMA provides the FCA’s power to take action against an individual for misconduct.
The five tier 1 rules are: (1) You must act with integrity. (2) You must act with due skill, care and diligence. (3) You must be open and cooperative with the FCA, the PRA and other regulators. (4) You must pay due regard to the interests of customers and treat them fairly. (5) You must observe proper standards of market conduct. From 8 September 2023, a sixth rule was added: (6) You must act to deliver good outcomes for retail customers. Tier 1 applies to almost all employees other than those performing certain ancillary functions (e.g. receptionists, cleaners, security guards, post-room staff, drivers, and a number of other specifically excluded roles).
Ancillary staff outside the Conduct Rules population are listed in COCON 1.1.2R. The Consumer Duty addition (rule 6) operates with the same enforcement mechanics as the existing five, but its scope tracks the Consumer Duty boundary — retail customers within the relevant distribution chain.
A claims handler who deliberately delays settlement of a valid claim to manipulate reserves would risk breaching rules 1 (integrity), 2 (skill, care and diligence) and 4 (customer interests). The firm has a duty under SYSC 23.4.5R to notify the FCA of disciplinary action taken for a Conduct Rule breach.
FCA Handbook, COCON. Financial Services and Markets Act 2000, sections 64A, 66. FCA Policy Statement PS22/9 (Consumer Duty Conduct Rule).
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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