Whistleblowing in UK branches

Policy Statement 8/17 | Consultation Paper 35/16

Published on 26 April 2017

Whistleblowing in non-EEA UK branches – PS8/17

This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses for Consultation Paper (CP) 35/16 ‘Whistleblowing in UK branches’ and sets out the final rules.

This PS is relevant to:

  • UK branches of non-European Economic Area (EEA) deposit-takers; 
  • UK branches of non-EEA Solvency II insurers; and 
  • UK firms that are the UK subsidiaries of non-EEA deposit-takers with a UK branch. 

In CP35/16 the PRA proposed to require:

  • UK branches of non-EEA banks and both EEA and non-EEA insurers to inform their workers about the PRA and the Financial Conduct Authority (FCA) whistleblowing services; and
  • any non-EEA deposit-taker with both a UK branch and UK subsidiary which is subject to the existing whistleblowing rules, to inform the UK branch staff about the subsidiary’s whistleblowing channel. This proposal did not apply to insurers.

Feedback on consultation responses

The PRA received nine responses to CP35/16. There was broad support for the proposals among respondents to the consultation and the PRA has made no changes to the final rules as a result of the responses received. However, the PRA has decided not to apply the whistleblowing rules to UK branches of EEA insurers as proposed in CP35/16. The change to the scope aligns the rules for deposit-takers with those for insurers. Therefore, the rules will not apply to UK branches of EEA deposit-takers or insurers. The PRA has made minor changes in the final rules to correct referencing. 

PDFPolicy Statement 8/17

Appendices

PRA RULEBOOK: CRR FIRMS, NON-CRR FIRMS: THIRD COUNTRY BRANCHES (WHISTLEBLOWING) INSTRUMENT 2017

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PRA RULEBOOK: SOLVENCY II FIRMS: THIRD COUNTRY BRANCHES (WHISTLEBLOWING) INSTRUMENT 2017

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Published on 18 September 2016

Whistleblowing in UK branches – CP35/16

In October 2015 the Prudential Regulation Authority (PRA) published PS24/15 ‘Whistleblowing in deposit-takers, PRA-designated investment firms and insurers’ in which it introduced requirements for UK deposit-takers, PRA-designated investment firms and Solvency II insurers to formalise whistleblowing practices. These rules built on best practice to ensure that workers have the opportunity to safely raise any concerns that they have.

This PRA consultation paper (CP) proposes amendments to PRA rules to require UK branches of non-EEA deposit-takers and both EEA and non-EEA insurers, including reinsurers, to inform workers about the PRA and the Financial Conduct Authority’s (FCA) whistleblowing services. It also proposes requirements for non-EEA banking groups with both UK branches and subsidiaries. The proposals in this CP do not apply to UK branches of EEA deposit-takers. 

The Parliamentary Commission on Banking Standards (PCBS) recommended that banks put in place mechanisms to allow their employees to raise concerns of risk and wrongdoing internally (‘whistleblowing’) in its final report in June 2013. The PCBS also recommended that banks assign responsibility for overseeing the effectiveness of these arrangements to a senior person. Firms have had this responsibility since the introduction of the Senior Managers regime and Senior Insurance Managers Regime on 7 March 2016. The FCA has published a consultation with similar proposals.  

The proposals contained in this CP have been designed in the context of the current UK and EU regulatory framework. The PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework, including those arising once any new arrangements with the European Union take effect.

Summary of Proposals

The policy proposals included in this CP require:

  • UK branches of non-EEA banks and of both EEA and non-EEA insurers to inform their workers about the FCA and PRA’s whistleblowing services; and
  • any non-EEA banking group with both a UK branch and UK subsidiary which is subject to our whistleblowing rules, to inform the staff of the branch of the subsidiary’s whistleblowing arrangements. This proposal does not apply to insurers.

Implementation

We expect that final rules that we are consulting on in this CP will come into force in September 2017. 

Response

This consultation closed on Monday 9 January 2017.

PDFConsultation Paper 35/16

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