A guide to whistleblowing and the FCA

Whistleblowing and the FCA 

The Financial Conduct Authority (FCA) has set out a series of regulations aimed at helping firms acting under its jurisdiction to take the correct action in the event of a whistleblowing incident.

THE FCA states that a number of institutions and firms can be the subject of whistleblowing complaints, including:

• A 'deposit-taker' with assets in excess of £250m. This includes banks, credit unions, and building societies
• An investment firm that operates under Prudential Regulation Authority (PRA) designation.
• Insurers that are subject to the Bank of England's Solvency II directive

Whistleblowing can be a sensitive issue, with many unhappy to have complaints over conduct made public, or escalated to authorities. Whistleblowing, however, is a hugely important tool for change within any industry, helping to foster respect between employees and employers, and keeping public trust high.

The FCA's advice to firms

The Financial Conduct Authority (FCA) has issued regulations to help associated firms to recognise and deal with whistleblowing in a satisfactory manner.

The FCA's document on Senior Arrangements, Systems and Controls advises that firms on the following:

• How to recognise when a whistleblower has made a report or disclosed concerns
• How to communicate with a whistleblower after they have spoken out, and provide feedback when necessary
• How to protect the confidentiality of whistleblowers after they have made a report
• Where firms and managers can find extra advice and support (both internal and external) when the whistle has been blown

To find out more, you can read the full FCA Senior Arrangements, Systems and Controls document online, here.

What arrangement do firms need to have in place?

In order to comply with the FCA's regulations, firms must establish procedures and communication networks for reporting concerns and establishing anonymity for whistleblowers. It is also vitally important that whistleblowers are protected from discrimination after they have raised a complaint

As well as these protective measures, it is recommended that firms carry out maintenance activities, including the submission of annual reports to a governing body regarding whistleblowing incidents and the effectiveness of the established procedures. The FCA should also receive a report outlining any contested accusations where the firm was ruled against at tribunal.

Finally, the FCA states that regular training must also be provided to employees, human resources staff, managers and other high-level individuals, and a whistleblower's champion must be selected.

What is a whistleblower's champion?

An important part of the FCA regulations, firms must appoint what is referred to as a 'whistleblower's champion'.

The champion, as you might expect, must ensure that procedures and policies relating to whistleblowing are followed to the letter. That includes being responsible for guaranteeing that any member of staff who has raised a complaint is not subject to discrimination, and can continue to carry out their role freely.

The whistleblower's champion must be a non-executive director within a firm, and must be able to operate with a level of autonomy and access to resources that will allow them to carry out such an important role.