New whistleblowing rules: Is the financial services sector ready?
A “whistleblowing champion” must be in place by 7 March 2016 in relevant financial services’ firms, says law firm Howard Kennedy.
October last year saw the publication by the Prudential Regulation Authority (PRA) of new whistleblowing rules that take effect from 7 September 2016.
In preparation for the new regime, relevant financial services’ organisations must nominate a “whistleblowing champion” by 7 March 2016 to oversee the implementation of whistleblowing procedures and to ensure that the rules are adhered to.
Financial services’ firms affected by the new rules include UK deposit-takers with assets of £250m or greater (including banks, building societies and credit unions), PRA-designated investment firms, insurance and reinsurance firms.
The whistleblowing champion’s responsibilities include:
- Ensuring and overseeing the integrity, independence and effectiveness of the firm’s policies and procedures on whistleblowing and associated policies to protect whistleblowers from being victimised because they have disclosed reportable concerns;
- Having oversight of the firm’s transition to its new arrangements for whistleblowing; and
- Overseeing the preparation of an annual whistleblowing report to the board.
The types of reportable concerns and those who can report them are much broader under the new rules than under current whistleblowing law. It is likely that managers will require more specific training to recognise whistleblowing under the new rules and it will be the responsibility of the whistleblowing champion to ensure that this takes place.
The new rules aim to encourage whistleblowing and minimise retaliation against whistleblowers. A firm’s fitness and propriety will certainly be called into question by the Financial Conduct Authority where there is evidence of retaliation by a firm against a whistleblower. Early preparation and training is highly recommended.
Howard Kennedy has 53 partners and numbers 350 people in total and works alongside national and international clients across many disciplines, including banking, corporate and commercial, family, finance, employment, dispute resolution, intellectual property, private client, real estate and tax. Howard Kennedy has particular focus on the Financial Services, Media and Technology, Real Estate, Retail and Leisure, Sports Individuals sectors, and, through HK One, the firm’s legal concierge service for high net worth individuals with complex legal needs.
Matt Baldwin, Coast
Tel: 01233 503200 / 07930 439739
Daryl Atkinson, Business Development & Marketing Director