UK: One month to deadline for implementing FCA and PRA whistleblowing rules

Given the distractions of the summer holiday season and the aftermath of the Brexit referendum, it would be understandable if other developments slipped off the radar. However, there is one particular deadline for regulated firms that demands urgent attention.  Under the whistleblowing rules published by the FCA and PRA back in October 2015, relevant firms must implement effective internal whistleblowing arrangements by 7 September 2016.   Relevant firms include:

• UK deposit-takers with assets of £250m or more (ie, banks, building societies and credit unions);
• PRA-designated investment firms; and
• Insurance and reinsurance firms subject to Solvency II, and the Society of Lloyd's and managing agents.

The arrangements must go further than the statutory whistleblowing protection available to workers and therefore even firms with pre-existing policies are likely to need to update them. 

The responsibility for overseeing the new arrangements lies with the "whistleblowers' champion", a senior manager who should have been appointed by 7 March 2016 (coinciding with the implementation of the Senior Managers Regime, Certification Regime and Senior Insurance Managers Regime). 

Our full briefing discussing the implications of the new rules, and highlighting action points for firms to consider now, is available here.

At a glance

From 7 September 2016 relevant firms must:

• have in place internal whistleblowing arrangements able to handle all types of disclosure from all types of person;
• include text in settlement agreements explaining that workers have a legal right to blow the whistle;
• tell all UK-based employees about the FCA and PRA whistleblowing services;
• present a report on whistleblowing to the board at least annually;
• inform the FCA if they lose an employment tribunal case with a whistleblower; and
• ensure appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service.

Existing whistleblowing policies may need to be amended to:

• ensure they cover the wider category of "reportable concerns";
• provide for different methods of communication and for confidential and anonymous reports;
• ensure reports are dealt with appropriately (including escalating to regulators), recorded and feedback provided; and
• clarify that workers can report directly to the regulator without disclosing internally first.

The FCA suggests that firms should consult with employees or their representatives when preparing a policy. 

Firms may wish to amend disciplinary policies to clarify that victimisation of the new, wider category of whistlebower is a disciplinary offence, and should also consider what processes should be put in place for non-employees.

Please do get in touch if we can be of assistance with implementing these requirements.