FCA Publishes Q1 2022 Whistle Blowing Data

Last week, the FCA published details of the number of new whistle blowing reports that it received during Q1 2022. Whistle blowing reports can be made to the FCA either by telephone, email, post or via the FCA online reporting form https://fca.clue-webforms.co.uk/webform/fca/en. In Q1 2022, the FCA received 276 new whistle blowing reports, the majority of which the FCA notes were reported using their online form

Method January 2022 February 2022 March 2022 Total
Email 20 29 21 70
Letter 4 1 5 10
Online Reporting Form 43 27 50 120
Telephone 21 17 26 64
Other 3 4 5 12
Total 91 78 107 276

Whilst the very nature of such reports means that perhaps the most meaningful of data (the actual content itself) must remain confidential, the FCA uses the whistle blowing reports it received to help them assess actual or potential harm being caused to consumers, markets, society at large or the UK economy as a whole.

As some reports relate to more than concern, these 276 reports are in respect of a total of 540 allegations.

As contact information for a whistle blower can be helpful in order that the FCA can discuss the reporter’s concerns or understand better the matter being reported, it is encouraging to note that according to the FCA’s data, in the majority of cases, the whistle blower did provide their contact information.

FCA whistleblowing Table on Complyport's website

The FCA reports that ordinarily the nature of the concerns that it receives reports on fall into 1 of 5 categories:

  • Fitness and Propriety
  • Treating Customers Fairly
  • FSMA
  • Culture
  • Compliance

The top ten allegations made during Q1 2022 were:

Allegation Jan 2022 Feb 2022 March 2022 Total
Fitness & Propriety 37 29 38 104
Treating Customers Fairly 31 15 24 70
FSMA 33 19 13 65
Culture of Firm 15 13 29 57
Compliance 14 9 15 38
Fraud 11 8 7 26
Systems and Controls 7 7 11 25
Unauthorised Business 4 7 8 19
SYSC 18[1] 9 7 2 18
Data Security 8 3 5 16
Total 169 117 152 438

Analysis of this data is of course purely speculative, but the following observations may be worth considering:

  1. January 2022’s figures are the highest for the quarter – is this because many firms undertake their annual training programme in January of each year?
  2. March 2022 had the second highest number of reports, could this be due to issues presenting themselves at the end of the quarter? End of internal reporting? Or, because some firms would have undertaken their annual training programme at the end of the financial year?
  3. The top 4 reasons for reports in themselves (296) exceed the number of reports made in the quarter (276)
  4. Just because the number of reports relating to SYSC 18 issues is low (18 reports made in the quarter) does not mean that all firms have implemented an effective and efficient whistle blowing regime. Instead, it may mean that employees are simply not identifying absences or failures in their firm’s whistle blowing regime, or they are not reporting it when they do.

At first sight, 275 individual whistle blowing reports in a quarter that relate to 540 allegations of some form of wrongdoing seems impressive. However, 276 reports = 276 people making reports over a 3-month period. Those 276 people work within the 50,000[3] firms that the FCA regulate, and the approximate 1.1 million people employed within the financial services sector[4].

Of course, 1 report of alleged wrongdoing is better than no reports at all – but if the UK’s whistle blowing regime is to really succeed and allow the regulator to instruct and influence a positive sea of change, then the whistle blowing champions as well as a firm’s senior management and employees alike need to start doing more. The 4th most popular reason for a report being made in Q1 2022 was culture – maybe this would be a good place to start?

 

[1] SYSC 18 sets out the FCA rules and guidance for firms in respect of their internal whistle blowing systems. A SYSC 18 report relates to alleged poor handling of a whistle blowing report, harm to an employee or ex-employee a lack of an appropriate speak up/whistle blowing system or failure of that system.

[3] https://www.fca.org.uk/about

[4] https://www.statista.com/statistics/298370/uk-financial-sector-total-financial-services-employment/

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