FCA reworks inside whistleblowing insurance policies after criticism | USAEMALL.com

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The UK financial watchdog has reworked its internal whistleblowing policy after it was criticised for mishandling complaints from current and former employees. 

The Financial Conduct Authority said the changes would clarify the different channels available for staff to raise concerns, how the policy applies to former employees, and what to expect when raising a grievance.

One of the main moves is in response to recent criticism of FCA chair Ashley Alder for sharing internally the identities of two former employees who had blown the whistle without first getting their permission to do so.

To avoid such a scenario, the FCA will clearly lay out how information about whistleblowers’ complaints can be shared internally by its chair or other non-executives. This will allow them to seek advice while maintaining the confidentiality of those making a complaint.

“We’re committed to a culture where people are confident to raise concerns and challenge poor practice and behaviour,” the FCA said, adding that the new policy would ensure that it was “easier for our people to use and they have a better experience of the process”.

Some of the changes reflect the recommendations of FCA senior independent director Richard Lloyd in his review of the mishandling of whistleblowers’ identities by Alder.

Lloyd, in September, said Alder “did not follow the [whistleblowing] policy to the letter” in forwarding correspondence from whistleblowers to others within the FCA without protecting their anonymity. But he cleared Alder of wrongdoing.

Lloyd’s review said the FCA should clarify that when whistleblower cases are escalated to non-executive directors they “will need to be shared with appropriate internal or external expert advisers on a confidential ‘need to know’ basis so they can be reviewed fully”. 

The changes are also designed to reflect how staff work from home more frequently and to adapt to changes in the type of complaints they make compared with a decade ago, according to officials.

The review of the watchdog’s policy, the first for a decade, started in March and has since consulted with several stakeholders, including the whistleblowing charity Protect.

The FCA’s “alarming” treatment of whistleblowers — both external and internal — was one of the key criticisms levelled at the watchdog in a scathing report published by an all-party parliamentary group on Tuesday. 

People who made complaints to the watchdog described it as “an organisation that fails properly to investigate and act on intelligence provided, and that fails to protect — and in some cases, actively harms — those who provide such information”, the parliamentary group said. 

The FCA executive board sent a memo to staff about the parliamentary group’s report on Tuesday, admitting it “makes for tough reading” and pledging to “take a step back and consider whether there are lessons from it for us to learn”.

However, the memo added: “We do not think the picture painted of our organisation is one we experience day-to-day,” and said the board was “proud of all you do to ensure markets function well”.

“Last year, for example, 10,000 misleading adverts were withdrawn or changed, 98 per cent of authorisations applications were assessed within deadlines and cancellations doubled, better deals were secured for savers, and more people were charged for financial crime offences than ever before,” it said.

The watchdog said last week that it received 322 external whistleblower reports in the three months to September — up from 253 the previous quarter and the highest quarterly figure since it started tracking such data four years ago.