Whistle blowing (SYSC 18) | FCA Handbook

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 an 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 Whistle-blowing 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:

1. a criminal offence; or
2. a failure to comply with any legal obligation; or
3. a miscarriage of justice; or
4. the putting of the health and safety of any individual in danger; or
5. damage to the environment; or
6. deliberate concealment relating to any of (i) to (v).