Whistleblowing

With one exception this section applies essentially only to Banks, PRA authorised Investment
firms and Insurers.
The exception is SYSC 18.3.9G which applies to all firms and states that any evidence that a
firm has acted to the detriment of a whistle-blower could call into question the fitness and
propriety of the firm or relevant staff and could therefore affect the firm’s continuing
satisfaction of Threshold Conditions or the status of a Senior Manager or Approved Person.
Although the rest of SYSC 18 is not directly applicable to Insurance Intermediaries, the FCA
encourages all firms to consider adopting appropriate whistle-blowing procedures and in
relation to the rules in SYSC 18 says “they may adopt them as best practice and if so, tailor
their approach in a manner that reflects their size, structure and headcount”.
Effectively therefore, firms such as Insurance Intermediaries should treat the Whistleblowing Rules as non-binding Guidance.
In summary the key rules on whistleblowing require a firm to: –
 Appoint a Senior Manager as their whistle-blowers’ champion
 Put in place internal whistleblowing arrangements able to handle all types of disclosure
from all types of person
 Put text in settlement agreements (employment disputes procedures) explaining that
workers have a legal right to blow the whistle
 Tell UK based employees about the FCA whistleblowing procedures
 Present a report on whistleblowing to the board at least annually
 Inform the FCA if it loses an employment tribunal with a whistle-blower
 Require its appointed representatives and tied agents to tell their UK-based employees
about the FCA whistle-blowing service
The FCA requests that firms should consider telling workers that they can blow the whistle to
the FCA, as the regulator prescribed in respect of financial services and markets matters
under Public Interest Disclosure Act (PIDA).
A qualifying disclosure, under PIDA, is a disclosure, made in good faith, of information which,
in the reasonable belief of the worker making the disclosure, tends to show that one or more
of the following (a “failure”) has been, is being, or is likely to be, committed:
(i) a criminal offence; or
(ii) a failure to comply with any legal obligation; or
(iii) a miscarriage of justice; or
(iv) the putting of the health and safety of any individual in danger; or
(v) damage to the environment; or
(vi) deliberate concealment relating to any of (i) to (v).
It is immaterial whether the relevant failure occurred, occurs or would occur in the United
Kingdom or elsewhere and whether the law applying to it is that of the United Kingdom or of
any other country or territory. Such disclosures may include for example:
 consistent breaches in the standards of FCA compliance;
 other agents or intermediaries acting without due authorisation after January 2005.
The FCA will give priority to live concerns or matters of recent history and will emphasise that
the worker’s first port of call should ordinarily be the firm.
An example of a whistle blowing procedure is included in the template section at the end of
this chapter (SYSC Template 12).