In September 2016, the FCA published Consultation Paper 16/25: Whistleblowing in UK branches of overseas banks (CP16/25). In CP16/25 the FCA proposed that UK branches of overseas banks tell their UK-based employees about the FCA and PRA whistleblowing services. The regulator also proposed that, where a branch of an overseas bank sits alongside a UK-incorporated bank that is subject to its whistleblowing rules, the UK-based staff of that branch should be informed of the subsidiary’s whistleblowing arrangements. The FCA also proposed not to require UK branches of overseas banks to implement any other of its rules related to whistleblowing.

The FCA has now published Policy Statement 17/7: Whistleblowing in UK branches of foreign banks (PS17/7). In PS17/7 the FCA reports that there was general support for the proposals in CP16/25 and it intends to implement them as consulted on, with one minor change. On this change the FCA refers to a point raised by a respondent suggesting that the FCA should mirror the protections in the Public Interest Disclosure Act 1998 (PIDA) for ‘reportable concerns’ to the FCA. The FCA’s response to this suggestion is as follows:

“On the PIDA suggestion, that legislation provides protections for ‘protected disclosures’ but not all ‘reportable concerns’. We cannot guarantee protections under PIDA where it does not apply. As a result, we don’t want to encourage disclosures on the basis of protections that may not apply in practice. We already have whistleblowing requirements in place that would apply to a subsidiary based in the UK; therefore a firm cannot become a subsidiary in order to avoid our whistleblowing requirements. We proposed to require a UK branch of an overseas bank that has a sister or parent company that is subject to our whistleblowing rules to tell staff in that branch that they are able to use the sister or parent company’s whistleblowing arrangements. On the suggestion that it would be easier to require people to report to their home regulator first, we have amended the Instrument to introduce guidance reminding branches that they may continue to have concurrent obligations to their home state regulator.”

The final rules set out in PS17/7 come into effect on 7 September 2017. UK branches of overseas banks will need to ensure that they are ready to implement the whistleblowing rules by this date.

View Whistleblowing in UK branches of foreign banks: PS17/7, 3 May 2017