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Whistleblowing rules in the financial services industry

Thursday, 18 August 2016 13:40

Despite the introduction of the UK’s Public Interest Disclosure Act 1998 and the subsequent Enterprise and Regulatory Reform Act 2013 which provided much needed protection for whistleblowers, employees in many industries across the UK have often continued to suffer mistreatment or retaliation for having the courage to report genuine wrongdoing in their work place.

This has led to a UK workforce fearing reprisals from speaking up, a fact reported by the UK Government in their ‘call for evidence’ in 2013.

However, one industry appears to have made significant strides in changing their staff’s fears. In 2013, in the wake of the LIBOR scandal, the Parliamentary Commission on Banking Standards (PCBS) recommended that financial institutions put in place mechanisms to allow and encourage their employees to raise concerns in the Banking Sector. As a result of the PCBS recommendations, new rules to encourage a culture in which individuals raise concerns and challenge poor practice and behaviour have now been published by the FCA and Prudential to improve accountability in the UK banking sector.

The rules which take effect in September 2016 apply to deposit-takers (such as banks, building societies, credit unions) with over £250m in assets, and to insurers who will now need to -

  • appoint a non-executive director to be the “Whistleblowers’ champion
  • put whistleblowing arrangements in place that are able to handle all types of disclosure from all types of persons
  • put text in settlement agreements explaining that workers have a legal right to blow the whistle
  • ensure that nothing in any employment contract or settlement agreement prevents or discourages an employee from making a protected disclosure
  • put in place “reasonable measures” to ensure that whistleblowers are not victimised

Instances of whistleblowing in the banking sector have been increasing in recent years. During 2013, the Financial Conduct Authority (FCA) received 1,040 whistleblowing reports, a 60% increase from 2012. This trend continued into 2014 with the FCA’s whistleblowing team being contacted 10,287 times and opening 1,368 whistleblowing cases.

Given this upward trend and the introduction of FCA rules, UK businesses in the financial services industry need to prepare themselves and ensure that they can effectively deal with the increase in whistleblowers who may now wish to come forward.

One way for businesses to do this is to make use of external and independent whistleblowing providers such as at SeeHearSpeakUp whose experience in this industry will help organisations comply with these new rules and safeguard their finances.

If your business would like further information about our whistleblowing services including a free quote, please access our online link and leave the rest to us.