The FCA and PRA said that the initiatives require internal whistleblowing arrangements, the appointment of a senior manager as whistleblowers’ “champion” and that settlement agreements explain employees’ legal right to blow the whistle.
Among the new rules are the requirement for institutions to inform the FCA if they lose an employment tribunal involving a whistleblower, and the need for company boards to attend a yearly presentation on whistleblowing.
The FCA said its new rules created to “build on and formalise the good practice already widespread in the financial services industry”.
Britain’s financial watchdog published on Tuesday a package of rules to standardise the sector’s approach to whistleblowing as part of efforts to stamp out misconduct which has tarnished the industry.
“Mechanisms within firms to encourage people to voice concerns – by, for example, offering confidentiality to those speaking up – can provide comfort to whistleblowers”, McDermott said.
But the FCA said they are “non-binding guidance” for all other firms, such as advisers. that it supervises. “For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistle-blowers and that a senior manager takes responsibility for the effectiveness of these arrangements”.
The consultation follows recommendations made by regulators to raise standards in the fixed income, currency and commodity markets after banks were fined billions of pounds for trying to rig foreign exchange benchmarks. The FCA has registered an increase in the number of reports it receives; for instance, there were 1340 whistleblowing disclosures recorded for financial year 2014/15 against 1040 in 2013/14 (28% increase). No rules regarding the payment of informants – as exist in the USA – have been introduced.
Firms will also have to inform their UK-based employees about the FCA and PRA’s whistle-blowing services and require their appointed representatives and tied agents to do the same.