FCA plans response to dissatisfaction of whistleblowers

08 June 2023

In May, the FCA published its findings from a qualitative assessment survey it conducted back in January 2022 to explore the experiences of whistleblowers reporting to it. As a result of the feedback received, the FCA is hoping to make improvements to its whistleblowing regime. In particular, the FCA will use the survey results to inform its contribution to the wider review of whistleblowing legislation that the Department of Business and Trade is undertaking.

The FCA is keen to stress the important role that whistleblowers play in the regulatory system. It has a dedicated whistleblowing team that considers all of the 1,000+ reports it receives each year. These reports are an important insight for the regulator and assist with both supervision of and enforcement against regulated firms. The FCA reports that around one third of whistleblowing cases lead to it taking some action.

It is unfortunate, therefore, that the feedback received in this survey indicated a high level of dissatisfaction with the experience among whistleblowers themselves. The FCA’s analysis of the feedback received is that whistleblowers do not feel listened to nor that the issues they report are properly explored. The majority of respondents who had chosen to be kept informed in relation to what they had disclosed reported that they did not find subsequent progress updates reassuring. For the nine individuals whose cases had concluded by the time of the survey, eight said that the outcome did not meet their expectations. Of the 21 respondents, 15 reported overall dissatisfaction with the FCA’s handling of their whistleblowing report.

Care should be taken not to overinterpret the feedback. This is a small sample size given the FCA only invited 68 whistleblowers to participate in its survey, and of these only 21 responded. However, the FCA has set out initiatives designed to improve whistleblowers confidence in it, including:

  • providing whistleblowers with more detail on what has been done with the information provided, or reasons for taking or not taking action;
  • improving the use of whistleblowers’ information across the FCA (e.g. making the best use of data and ensuring that end-to-end whistleblowing processes are as efficient as possible);
  • enhancing its webform – which is the most popular way for whistleblowers to contact the FCA – to fully capture every whistleblower’s disclosure; and
  • engaging with the Department for Business and Trade to support a review of whistleblower legislation to enhance the wider whistleblowing system.

The FCA is keen to stress that whistleblowers are an important contributor to the regulatory process, and it values their contributions. Improvements to the process could ameliorate the concerns of those making reports to ensure they feel their reports have been taken seriously and investigated appropriately. The FCA reasonably observes that it is often not able to provide whistleblowers with much information given the requirement of confidentiality set by s.348 Financial Services and Markets Act 2000. This is a tension that may need to be addressed at a policy level in order fairly to balance the confidentiality of regulated firms and the need to build confidence in whistleblowing. It is therefore timely that the Department of Business and Trade is undertaking a wider review of whistleblowing legislation.

FCA sets out steps to improve whistleblower confidence | FCA

the FCA will use the survey results to inform its contribution to the wider review of whistleblowing legislation that the Department of Business and Trade is undertaking