New whistleblowing rules in force today for financial services

whistleblowing FCA rules financial services
Credit: Ben Goerz freeimages.com

New whistleblowing rules come into force today for the financial services sector. The changes are intended to remove barriers that prevent employees from disclosing concerns about wrongdoing within financial service firms.

The rules apply to organisations regulated by the Financial Conduct Authority (FCA) and/or Prudential Regulation Authority (PRA).

In March 2016 firms were required to appoint a whistleblowing champion with responsibility for overseeing the introduction of the new whistleblowing rules for the 7 September 2016 deadline.

In addition to existing whistleblowing legislation protecting whistleblowers, the new rules focus on creating a positive obligation on firms to deal with whistleblowing disclosures so that employee are reassured they will not suffer retaliation.

Jillian Naylor, employment Partner at Linklaters, comments:

“The new whistleblowing requirements in the financial services sector reflect the increasing focus by the public and the regulators on encouraging people to report concerns so as to manage risk.”

David Whincup, Employment partner at Squire Patton Boggs, warns:

Employers should be aware that this is not just a box ticking exercise – there are penalties for companies found to be in breach of these new regulations, even before you get onto the prospective “naming and shaming” which now forms a key part of the regulators’ armoury.” 

Summary of the new whistleblowing rules

Firms need to have arrangements in place to:

  • handle anonymous and confidential whistleblowers
  • enable proper escalation of concerns to the FCA or PRA
  • ensure there are up-to-date written procedures for handling concerns
  • prevent whistleblower victimisation from other firms
  • facilitate whistleblower feedback
  • keep whistleblowing records
  • Train staff.

The rules also require settlement agreements to make clear an employee retains a right to make a protected disclosure regardless of confidentiality obligations.

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