New whistleblowing rules for financial sector introduced

Implementation date: 7 September 2016

The Accountability and Whistleblowing Instrument 2015 (FCA 2015/46) introduces a requirement for large financial companies (specifically banks, building societies, credit unions, Prudential Regulation Authority (PRA)-designated investment firms, insurance and reinsurance firms within the scope of Insolvency II and Lloyds managing agents), with a total turnover of at least £250 million per year, to take steps intended to encourage more whistleblowing at the earliest opportunity and to protect whistleblowers in their business.

The new rules come into force on 7 September 2016, but firms had until 7 March 2016 to appoint a senior manager as a whistleblowers' champion to oversee the integrity, independence and effectiveness of the firm's policies and procedures on whistleblowing.

The key new rules on whistleblowing require a firm to:

  • put in place internal whistleblowing arrangements, including tracking the outcome of whistleblowing concerns, providing feedback to the whistleblower and maintaining appropriate records of reports;
  • be able to handle all types of disclosure from all types of person;
  • include a clause in settlement agreements explaining that the worker maintains the legal right to blow the whistle;
  • inform UK-based employees about the Financial Conduct Authority (FCA) and PRA whistleblowing services and require its appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service;
  • present an annual report on whistleblowing to the board by the whistleblowers' champion;
  • notify the FCA if a successful whistleblowing claim has been brought against it at an employment tribunal; and
  • provide appropriate training to UK-based employees and their managers and to the person responsible for operating the organisation's whistleblowing arrangements.