Practice note, Whistleblowing: regulatory health check for financial institutions’ whistleblower frameworks

Financial institutions should regularly review their whistleblower frameworks for two main reasons:

• to ensure that the frameworks reflect the most up to date regulatory guidance, and
• to protect themselves and those with specific responsibilities for managing the frameworks from regulatory scrutiny and sanctions

The introduction of the senior managers and certification regime, coupled with the “non-financial conduct” agenda being pursued by the FCA, presents firms with an opportunity to review their whistleblower frameworks.

This practice note provides a helpful checklist which financial institutions can use to assess their existing whistleblower frameworks. The health check is distilled into six main steps:

Step 1: Diagnosing whistleblows effectively

Step 2: Maintaining policies and procedures

Step 3: Making required regulatory notifications

Step 4: Preventing conflicts of interest and “wrong” behaviours

Step 5: Conducting root cause analysis

Step 6: Embedding a culture of psychological safety

The full practice note has been reproduced from Practical Law with the permission of the publishers.