The war stories emerging from the 2007/2008 financial crisis
predominantly blame the bankers for its creation, in tandem with
allegations of weak regulation. Since the mid noughties the UK
financial services regulatory regime has undergone a significant
overhaul, resulting in a far tougher regulator with a keen eye on
individual accountability. The UK's new whistleblowing rules
will bolster that position.
On 6 October, following recommendations by the Parliamentary
Commission on Banking Standards in 2013, the UK financial
regulators (the Prudential Regulation Authority and the Financial
Conduct Authority) introduced new whistleblowing rules. In
practice, what this means is that by 7 March 2016 relevant firms
must have appointed a sufficiently senior 'whistle-blowers'
champion' who must have the firm sufficiently prepared for the
new whistleblowing regime by September 2016. The new rules will
require a firm to:
implement internal policies and procedures to handle
draft settlement agreements to give workers a legal right to
tell UK employees about the FCA / PRA whistleblowing
report to the board at least annually on whistleblowing
have a mechanism to inform the regulator if it loses an
employment tribunal with a whistleblower
require its appointed representatives and agents to tell their
UK based employees about the whistleblowing service
Why is this interesting to financial services businesses in
Guernsey? It will come as no surprise that in Guernsey
whistleblowing is most certainly on the financial services
regulator's agenda. In 2013, no doubt following the UK
Parliamentary Commission's recommendations, the Guernsey
Financial Services Commission announced the introduction of a
designated whistleblowing line that made available a direct line to
its enforcement division, with anonymity / confidentiality
preserved (if so desired).
However, unlike the UK that already has legal protections for
whistle-blowers (protected disclosure), Guernsey has no such
protections for breaches of confidence by employees. However, that
is likely to change for financial services businesses (at least) in
the near future if the changes proposed in the revision of the
Guernsey financial regulatory laws, as consulted upon at the
beginning of this year, proceed as planned (and given the Guernsey
regulator keeps a keen eye on regulatory developments in the
In so far as whistleblowing is done for genuine reasons we are
broadly in support of the proposed protections being drafted into
the new laws, but this comes with a caution that there must also be
appropriate deterrents to prevent malice.
We are hoping to hear more on Guernsey's regulatory law
revisions early next year.
Click here to read the FCA Policy Statement:
Whistleblowing in deposit-takers, PRA-designated investment firms
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On 1 January 2017 the Financial Services Rule Book 2016 comes into operation. With this will be the requirement on all Isle of Man licence holders to establish, implement and maintain an effective whistleblowing policy.
The Ministry of Human Resources has recently issued a string of new ministerial resolutions and decrees designed to address gaps in the employment regulatory framework and reinforce existing legislation...
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