Whistleblowing remains high on the regulatory agenda. What can firms expect in 2015?
Whistleblowing remains a hot topic. Last year saw a raft of amendments to the UK whistleblowing regime which took effect from June 2013. However, the area remains in flux, with further reviews ongoing by Government, Regulators and the whistleblowing charity Public Concern at Work.
Meanwhile, disclosures made in the financial services sector have continued to rise, with disclosures to the FCA having trebled since 2011, with a total of 1,200 claims expected in 2014.
One of the main issues under review has been whether the UK should offer financial incentives to whistleblowers. This was a controversial proposal, explored in light of the introduction of a similar regime in the US. For now, this appears to have been ruled out.
When the Department for Business, Innovation and Skills (BIS) responded to its Call for Evidence in June 2014, one key conclusion was that there would be no introduction of financial incentives. However, BIS did leave the door open for this to be reconsidered in relation to specific organisations or cases. It also highlighted that statements on the issue were awaited from the PRA and FCA.
If the BIS response left any uncertainty, the joint PRA/FCA publication of July 2014 makes it clear that they do not support the introduction of financial incentives in the financial services sector. This is based on their research, which identifies a number of flaws in such a system.
Concerns include: the harm that large pay-outs would do to public perceptions of the sector; the risk of malicious reporting and/or entrapment; and also the risk that rewarding whistleblowers for performing what, for many individuals, is a regulatory duty, could undermine the function of the regulators altogether. Read the full article >