City watchdog plans to overhaul treatment of whistleblowers in 2019

The City watchdog is planning an overhaul of its approach to whistleblowers in the new year, in order to encourage more people to feel safe in coming forward.

The Financial Conduct Authority (FCA) said that it would announce details of the plan, first reported by the Financial Times, later in 2019. 

It will revisit how it maintains confidentiality of whistleblowers as part of the overhaul. It will also look at how information is shared between supervision and enforcement teams, and how it can enhance senior oversight of its investigations.

The move comes after the FCA was criticised earlier this year for how it has handled whistleblowers in previous cases. In 2013, the watchdog was known to have revealed the identity of a former Royal Bank of Scotland employee to the bank while they were taking part in an investigation.

The Financial Regulators Complaints Commissioner, an authority which handles complaints against watchdogs, said the FCA had failed in its duty to take sufficient care in establishing whether the employee had sought anonymity in the case.

Last month, the FCA said that most British banks do not have a consistent approach in place when assessing and escalating whistleblower concerns. It added that some of them need to improve arrangements to protect those who come forward from future victimisation.

The regulator received its highest number of disclosures from whistleblowers in May this year, after supervision director Megan Butler warned firms about failing to tackle sexual harassment.

The disclosures made at the time related to a range of issues including racism, physical bullying and homophobia, as well as issues around gender. 

The FCA’s executive director for strategy and competition Christopher Woolard said last month that across the firms it regulates, only 15 per cent have female directors, and 6.5 per cent have a female chief executive officer.

“The reasons for this are various and complicated,” he said in a speech. “But if we can’t be definitive about the exact cause, we do want clarity on the effect.

“That’s why we plan to explore the relationship between diversity and firm behaviour, including misconduct, to understand if there is a link between the two.”