Regulators set out rules on whistleblowing

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Regulators set out rules on whistleblowing

Regulators have set out the rules on whistleblowing in an effort to build on existing practices and encourage individuals to raise concerns and challenge poor behaviour.

For people to have the confidence to come forward, the regulator said it was vital that firms have adequate policies in place, and the rules were designed to build on and formalise existing good practices.

The 36-page publication, Whistleblowing in Deposit-Takers: PRA-designated Investment Firms and Insurers, lays out the measures contingent on deposit-taking entities with more than £250m in assets, and insurers subject to the Solvency II directive.

Relevant firms have until 7 September 2016 to comply.

The components include putting mechanisms in place to deal with all types of disclosure from all types of people and writing into settlement agreements the legal right for workers to disclose.

The FCA and PRA also opened a consultation on the frame of reference for a wider package of reforms that aim to improve accountability in banks and insurers.

The consultation looks at proposed changes to the way firms seek and provide references for candidates of certain roles, and is open until 7 December.

“Whistleblowers play an important role in exposing poor practice in firms, and have in past years contributed intelligence crucial to action taken against firms and individuals. It is in the interests of the industry and regulators that wrongdoing is identified and addressed promptly,” FCA acting chief executive Tracey McDermott said.

Adviser View

David Penny, managing director at Somerset-based Invest Southwest, said: “It is not just the large firms but all companies that are prone to bad practice. Therefore, the FCA’s measures should be welcomed. An employee should be able to go to the employer first. If malpractice continues, it should be very easy to whistleblow confidentially. But history has shown that lots of reputable-looking firms have been guilty of malpractice, so what is to suggest this will change?”