The FCA and PRA introduced whistleblowing rules in October 2015 to encourage individuals to speak out against poor practice and behaviour in financial institutions. A summary of the rules can be read here.
The FCA and PRA have now issued consultation papers (CP16/25, CP35/16) on their proposed approach to applying the new whistleblowing requirements to UK branches of overseas banks.
The consultations close on 9 January 2017. The regulators note that the proposals will be kept under review in light of any negotiations following the UK’s vote to leave the EU. The consultations can be read here and here.
Who does it apply to?
The FCA consultation applies to UK branches of overseas banks.
The PRA consultation applies to UK branches of non-EEA deposit-takers and of both EEA and non-EEA insurers, including reinsurers.
The PRA expects the rules consulted on to come into force in September 2017.
- the FCA proposes that UK branches of overseas banks tell their UK-based employees (as defined) about the FCA and PRA whistleblowing services, that they can disclose reportable concerns to the FCA or the PRA and that disclosure is not conditional on a report first being made via the firm’s internal procedures
- the FCA also proposes that, where a branch of an overseas bank sits alongside a UK-incorporated bank that is subject to its whistleblowing rules, the UK-based staff of that branch should be informed of the relevant group entity’s whistleblowing arrangements and indicate that these arrangements may be used by employees of its UK branch. This communication must be included in the branch’s employee handbook or equivalent document
- the FCA does not propose to require UK branches of overseas banks to implement any other regulatory whistleblowing rules, although it notes that the rules represent good practice guidance
- the PRA proposes that UK branches of non-EEA banks and both EEA and non-EEA insurers inform workers about the regulators’ whistleblowing services, including how to contact the regulators and what constitutes a “protected disclosure”
- the PRA also proposes that any non-EEA banking group with both a UK branch and UK subsidiary which is subject to the regulators’ whistleblowing rules should inform the staff of the branch of the subsidiary’s whistleblowing arrangements and explain that these arrangements may be used by staff. The PRA makes it clear that it does not expect firms to have to contact workers individually
- the PRA makes clear that UK branches will not be required to establish their own internal whistleblowing channels and that it will not apply any requirements around employment contracts or settlement agreements to UK branches
- the PRA has also clarified that the prescribed responsibility of ‘whistleblowers’ champion’ does not apply to UK branches
View our whistleblowing assurance review for the financial services sector here.