UK financial regulator to overhaul whistleblowing policies

The UK’s top financial regulator has vowed to overhaul its dealings with whistleblowers, after in-house research revealed widespread dissatisfaction with its handling of complaints from industry insiders.

In a study published on Thursday, the Financial Conduct Authority reported that fewer than 20 per cent of whistleblowers were satisfied that the watchdog had properly heard and investigated their complaints — a perception fuelled by widespread frustration with how little information was shared with them after the initial complaint.

After receiving 1,041 whistleblower reports in the year to March 2022 and securing responses from just 21 of the 68 people it asked to complete the survey, the FCA has pledged to give whistleblowers more information on how their tips are used.

The regulator also promised to improve internal systems for sharing whistleblower intelligence, upgrade its online portal for submitting whistleblowing complaints and make a “full contribution” to the government’s planned review of the UK’s whistleblower framework.

“We need the intelligence whistleblowers provide to identify and act on problems in the firms we regulate,” said Therese Chambers, FCA executive director of enforcement and market oversight.

“We want to make sure we’re capturing and using the information provided by whistleblowers as effectively as possible, and to give them as much information as the law allows on how we have acted on their concerns,” she added.

Sybille Raphael, legal director at whistleblowing charity Protect, said the FCA already allocated “very generous” resources to whistleblowers relative to other regulators and that the latest initiative would “help” the watchdog’s engagement with insiders wishing to alert it to wrongdoing.

She praised the FCA’s promise to boost training for its whistleblowing teams — a change the regulator said would enable teams to “get to the heart of” concerns during initial conversations and “ensure that when whistleblowers are reporting to us in stressful circumstances, we are able to recognise this and respond appropriately”.

David Lewis, professor of employment law at Middlesex University, said the FCA had “reacted very positively” to the survey results and was “to be congratulated for being ahead of regulators in other sectors”.

“It rightly focuses on the importance of providing as much feedback as possible to whistleblowers,” he said. “If inadequate feedback is given, whistleblowers will not feel assured that their concerns have been taken seriously and potential whistleblowers may be deterred from disclosing information about wrongdoing.”

The FCA said whistleblowing cases closed in the year to March 2022 took an average of 12.25 months to resolve, and that the progress of cases could be slowed if the tips related to a broader issue or investigation.

The regulator publishes quarterly data on whistleblowing complaints, which shows that the number of disclosures has remained broadly steady since 2019.