Whistleblowing in financial services

Are you prepared for the new whistleblowing regime, which becomes active next week on 7 September? It is designed to impose cultural change so that individuals feel encouraged to raise concerns, and feel safe following a disclosure. The rules apply to banks, building societies and credit unions with assets over £250M, Solvency II insurers and PRA-designated firms. Our guidance sets out the new rules, and we encourage all HR practitioners and business managers to become familiar with the rules and implications as it is intertwined with the Senior Manager and Certification regimes with links to fitness and propriety.

Restrictions on whistleblowing in settlement agreements

Settlement agreements dated on or after 7 September will be required to include wording that makes it clear that nothing will prevent the individual from making a protected disclosure. Neither must individuals be asked to enter into warranties that require them to disclose that they have made a protected disclosure or that they know of no information which could form the basis of a protected disclosure.

Similar constraints are being applied in the US by the Securities and Exchange Commission (SEC). It is clear from two recent matters (BlueLinx and Health Net) that the SEC will take action against companies that attempt in any way to dissuade potential whistleblowers. In both these cases, the employer inserted provisions into severance agreements, trying to restrict individuals from collecting monetary awards from the SEC in exchange for making disclosures. Full details of these cases can be found in our sister blog, Investigations Insight.