Whistleblowing in focus
06 May 2022
New UK legislation in relation to whistleblowing is being considered by Parliament, but at the same time, the Financial Conduct Authority (FCA)'s own consideration of whistle-blowing reports appears to face significant delays.
In late April 2022, a new Whistleblower Bill had its first reading in the House of Commons. The Bill if passed would replace the Public Interest Disclosure Act 1998 ("PIDA") which commentators now argue is inadequate.
The Bill would establish an new independent Office of the Whistleblower (OW) to protect whistleblowers, make provision for the OW to set, monitor and enforce standards for management of whistleblowing cases, provide disclosure and advice services, direct whistleblowing investigations and order redress for detriment suffered by whistleblowers. It would also create new offences relating to the treatment of whistleblowers and repeal the PIDA.
At the same time, for FCA regulated firms, prescriptive rules apply in relation to whistleblowing under the SYSC sourcebook's Chapter 18. These require firms to establish, implement and maintain appropriate and effective arrangements for the disclosure of reportable concerns by whistleblowers. For EEA and third country banking firms, this includes a stipulation that employees must be informed of their right to whistle-blow direct to the FCA/PRA, and many other firms highlight this option in their whistle-blowing procedures in any event. The FCA operate a whistleblowing "hotline" to enable whistleblowing concerns to be reported by phone, email, online or in writing.
However, recent data indicates the FCA had assessed less than a quarter of the 1,025 reports it received from whistleblowers in 2021 and was still assessing over 400 reports from 2019 and 2020. Of those assessed in 2021, only 7 had led to "significant action" being taken.
So while legislative change may be afoot, there would appear to be significant delays in the practical handling of reports by the FCA itself.
Authors: David Capps, Senior Consultant, Tom Connor, Partner
