The Financial Regulators Complaints Commissioner (an independent body responsible for reviewing the conduct of financial regulators in the UK) this month published a number of recommendations for regulator the Financial Conduct Authority (FCA), in response to a whistleblower’s complaint about the FCA’s approach to their disclosure and how they had been treated.

Protect welcome the Commissioner’s recommendations as they mirror our own recommendations of how regulators should handle concerns raised by whistleblowers, as specified in our Better Regulators Guide and ongoing Legal Reform Campaign. Handling whistleblowers in an effective and supportive manner is essential for all regulatory bodies to properly deliver their public function, maintain their reputation and encourage further disclosures.

Protect published its Better Regulators Guide following a series of successful round tables with regulators and professional bodies to share and learn best practice with the overall aim of achieving a sea change in whistleblowing.

If whistleblowers are repeatedly mishandled the perception of trust will be damaged, leading to lower engagement from concerned workers and fewer sources of intelligence for regulators to act upon.

The Commissioner made the following observations:

  • I do consider that the fact that the FCA neither asked you any follow-up questions, nor engaged with you on this issue was a mistake

After receiving a disclosure, the whistleblower should firstly be asked if they wish to receive feedback. Whistleblowers should be provided with the opportunity to fully clarify the information given to the regulator for assurance that their concern has been understood and will be taken seriously.

Principle Three of Protect’s Better Regulators Guide states:

Offering the whistleblower an opportunity to comment on the regulator’s findings before publication may be appropriate. This may allow the whistleblower to identify any errors or issues which have not been raised in the report and ask further questions.

 

  • The FCA [should] consider whether 12-week updates are sufficient in all whistleblowing cases.

Whistleblowers should be provided with a time frame if an investigation is to take place following their disclosure. This is useful as it prevents dispute, uncertainty and alleviates anxiety for the whistleblower. Regardless of the length of time of the investigation or whether follow-up action has been taken, regulators should attempt to regularly provide whistleblowers with detailed updates .

Principle Three of Protect’s Better Regulators Guide states:

Ideally, a disclosure should be acknowledged (within 24 hours if possible). [It is best] if the regulator and the whistleblower can agree on a frequency of contact, e.g. once a month. This will be a key part of managing the relationship if the concerns are fed into an investigation that takes a long time to conclude. The whistleblower is less likely to approach another body, or even the media if they know when to expect a response.

Protect’s draft Whistleblowing Bill, as part of our Legal Reform Campaign includes a new clause, “Standards for Regulators”, which obligates feedback following a disclosure to be given within 3 months, or 6 months in duly justified cases.

 

  • Confidentiality has to be respected; but … whistleblowers – and the public more widely – need to have enough information to be assured that the regulator is doing its job.

Regulators should provide as much detail as possible to whistleblowers about the outcome of an investigation, balancing the interests of the whistleblower with the confidentiality of the accused. As the Commissioner commented, “the FCA needs to be as bold as it can be in disclosing information…to provide meaningful reassurance”. By providing an outcome report of the concerns, public confidence is instilled in the regulator, encouraging others to raise public interest concerns with the regulator in future.

As referenced in Principle Two of Protect’s Better Regulators Guide:

Confidentiality is the primary means by which a regulator can protect whistleblowers … breach of confidentiality could damage the reputation of a regulator or professional body … putting others off from coming forward in the future.

Principle Three of the Better Regulators Guide states:

Regulators and professional bodies should look for any information that can be provided to the whistleblower to reassure them and be open where there are restrictions (e.g. confidentiality or market sensitive then communicate this to the whistleblower) or where no further investigation is required.

Later in the year we intend to hold a webinar event for regulators covering these issues, more details on the event will follow soon.

It is crucial for regulators to follow good practice when whistleblowers approach them to ensure whistleblowers feel heard and that their concerns matter. We are pleased that the Commissioner’s recommendations were taken on board by the FCA and hope they are applied not just by the FCA but all regulators going forward.

By Nneka Egbuji

If you are a regulator or professional body who would like to know more about opportunities to engage with Protect and the Better Regulators Campaign, or find out more about our campaign for legal reform, please email Policy Officer Laura Fatah laura@protect-advice.org.uk