Laura WilesFCA has published a report setting out the findings from its whistleblowing qualitative assessment survey 2022, which engaged with a small sample of recent whistleblowers who disclosed concerns about wrongdoing to the regulator.
The report notes that FCA already exceeds the requirements of UK whistleblowing legislation in order to support the practice in the financial services sector, including by having a dedicated whistleblowing team, providing feedback on the outcome of a report where it is requested, and actively engaging with whistleblowers in its 2021 “In confidence, with confidence” campaign. It has also implemented rules and guidance on internal whistleblowing arrangements to firms it regulates.
The findings include:
- While the majority of respondents said they found FCA’s whistleblowing webpages useful, suggestions for improvements included publishing timelines and escalation points for investigating reports, as well as examples of the typical subject matter of reports received.
- A common reason for reporting to FCA was that the whistleblower made an internal complaint that was ignored, suggesting that respondents had turned to FCA as a ‘listener of last resort’.
- Over half of the respondents were ‘extremely or somewhat dissatisfied’ with the FCA Whistleblowing team in relation to listening and exploring issues reported. Respondents felt there was not enough dialogue between them to ensure their concerns were understood, and that FCA were reluctant to act and thoroughly investigate reports. FCA noted that in response to this concern, it would:
- Improve its webform to ensure that it captured as much relevant information as possible in the first instance; and
- Strengthen the training of its Whistleblowing team to improve initial conversations with whistleblowers.
- 10 of the 21 respondents found the progress updates on their reports to be ‘not at all reassuring’, that they lacked substance, provided no real information, and did not indicate whether an investigation was underway. FCA noted that in response to this concern, it would:
- Improve processes to ensure that other teams assessing disclosures submit any follow-up questions as soon as possible; and
- Where a conclusion is made that the disclosure cannot be progressed, aim to inform the whistleblower earlier.
- Despite overall dissatisfaction with the reporting processes and outcomes, 9 of the 21 respondents said they would definitely make a further whistleblowing report to FCA in future if they encountered wrongdoing. 6 of the 21 respondents said they definitely would not do so.
FCA highlighted the significant constraint on the feedback it is able to provide whistleblowers due to its obligation under section 348 FSMA, which requires it to keep information that it obtains during its functions and duties confidential. This includes information obtained from firms when acting on the basis of whistleblowing intelligence.