The PRA and FCA released a joint consultation paper (“CP”), FCA CP15/4 PRA CP 6/15 on 23 February 2015 that sets out proposals related to whistleblowing in deposit-takers, PRA-designated investment firms and insurers. The paper has been published after the Parliamentary Commission on Banking Standards June 2013 report that recommended that the PRA and the FCA produce a package on measures to formalise firms’ whistleblowing procedures and ensure that such mechanisms are effective.

The CP is designed to build upon current good practice and the FCA’s existing guidance on how firms handle whistleblowers. The proposed rules apply to UK banks, building societies, credit unions, PRA designated investment firms and insurers and reinsurers, including third country branch undertakings, within the scope of Solvency II and to the Society of Lloyd’s and managing agents. The FCA may introduce similar whistleblowing mechanisms to a wider range of firms that fall under its regulation but will issue another consultation paper before proceeding with these plans.

The PRA and FCA propose that relevant firms should:

  • put in place internal whistleblowing arrangements and inform UK-based employees of such arrangements;
  • inform employees that they can blow the whistle to the FCA or PRA;
  • offer protection to all whistleblowers, regardless of their relationship with the firm and the topic of disclosure;
  • state in new employment contracts and settlement agreements that nothing in the agreement prevents an employee (or ex-employee) from making a  protected disclosure; and
  • allocate the prescribed responsibility for whistleblowing under the Senior Managers Regime  and Senior Insurance Managers Regime to an individual (named the “whistleblowers champion”) who  will oversee the effectiveness of internal whistleblowing arrangements,  including those that protect the whistleblower from detrimental treatment; prepare an annual report to the board  about their operation and report to the FCA where, in a case before the employment tribunal  contested by the firm, the tribunal finds in favour of a whistleblower.

The consultation closes on 22 May 2015.

The consultation paper can be found here