Banks and insurers must offer protections to all whistleblowers, under proposals outlined today by the FCA.
In a joint consultation paper with the Prudential Regulation Authority, the FCA says firms should put internal whistleblowing arrangements in place and inform employees that they can whistle blow to regulators.
The proposals apply to UK banks, building societies, credit unions – with an exemption for those holding less than £25m in assets – and PRA-designated investment firms.
They have been published in response to a recommendation from the Parliamentary Commission on Banking Standards that banks put in place mechanisms to allow staff to raise concerns internally.
The FCA says firms should have internal procedures that reassure all employees that they can raise concerns.
It says: “Ideally, employees should feel comfortable speaking openly to management, but, where employees do wish to blow the whistle in confidence, there must be a route available to them.”
The regulator says firms should offer the same protections to anybody blowing the whistle on any type of concern.
It says: “Mistreatment of a whistleblower would be a matter of regulatory concern regardless of whether their disclosure related to a breach of a specific FCA or a PRA rule because it may be evidence of a culture harmful to those choosing to speak out.”
It says firms should appoint a “whistleblowers’ champion”, who has responsibility for overseeing whistleblowing arrangements.
This must be a non-executive director who is a senior manager under the senior managers regime.
Under final rules for the new senior managers regime, published today, the FCA says non-executive directors without specific responsibilities are not in scope.
The regime will apply to the chairman of a firm, the senior independent director, and chairs of the risk, audit, remuneration and nominations committees.
FCA chief executive Martin Wheatley says: “Our approach is driven by wanting to ensure firms are managed in a way that reflects good governance and promotes the right culture and behaviours.
“Having a narrow SMR will also allow the FCA to focus regulatory resources on those responsible for key business areas and board committees.
“NEDs play a vital role in providing challenge to and an independent oversight of the executive directors. Including all NEDs in the new regime would risk the unintended consequence of changing the whole nature of this vital role.”