The Financial Conduct Authority has unveiled a package of rules designed to encourage a culture where individuals feel able to raise concerns and challenge poor practice and behaviour.
The new rules include:
• appointing a senior manager as a firm’s whistleblowers’ champion
• put in place internal whistleblowing arrangements able to handle all types of disclosure from all types of person;
• put text in settlement agreements explaining that workers have a legal right to blow the whistle;
• tell UK-based employees about the FCA and PRA whistleblowing services;
• present a report on whistleblowing to the board at least annually;
• inform the FCA if it loses an employment tribunal with a whistleblower; and
• require firms’ appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service.
The package of rules, published today (6 October), by the FCA and the Prudential Regulation Authority, full effect in September 2016, and apply to deposit-takers (banks, building societies, credit unions) with over £250m in assets, and to insurers subject to the Solvency II directive. They are non-binding for all other firms supervised by the FCA.
Tracey McDermott, acting FCA chief executive, said: “Whistleblowers play an important role in exposing poor practice in firms and they have in the past few years contributed intelligence crucial to action taken against firms and individuals. It is in the interests of the industry and regulators alike that wrongdoing is identified and addressed promptly.
“For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies.”
“These rules are designed to build on and formalise examples of good practice already found in parts of the financial services industry and aim to encourage a culture in which individuals working in the industry feel comfortable raising concerns and challenge poor practice and behaviour.”
According to FCA figures, it has seen a 28 per cent increase in the number of whistleblowing disclosures made for the financial year 2014/15 compared to the previous financial year.
Today’s publication follow on from the FCA’s and PRA’s final rules on improving individual accountability in the UK banking sector, published on 7 July 2015.