On January 1 2017, the German Federal Financial Supervisory Authority (“BaFin”) set up an online whistleblowing system allowing anyone to anonymously report alleged violations of supervisory law. BaFin is the national supervisory authority for banks, financial service institutions, the securities market and insurance undertakings in Germany. The online whistleblowing system is part of an effort to comply with Section 32 of the 2014 European Market Abuse Regulation (MAR) which obliges EU member states to establish effective mechanisms for reporting actual or potential infringements of EU law. It is the latest addition to a central reporting platform established at BaFin in July 2016.
New UK Regulations to Govern Whistleblowing in Financial Institutions
This month, the FCA and PRA announced a new regime for whistleblowing that will start to be phased in from March 2016. This is part of the broader desire on the part of the UK regulators to encourage individuals to raise concerns and challenge poor practice and behaviors within the financial institutions. The regulations build-on and formalize examples of good practice within the financial services industry.
UK Whistleblowing Protection Extended to Partners
In the UK, whistleblowing law is based on a statute prohibiting a “worker” being dismissed or subjected to any other detriment because of having made a “protected disclosure”. Until this week, the general view was that the definition of “worker”, and therefore whistleblowing protection, did not extend to partners. There were many reasons for this view, such as the fact that discrimination legislation (which protects partners as well as other workers), is, in contrast to whistleblowing legislation, explicit as to its application to partners. However, this week, a landmark Supreme Court decision, Clyde & Co. LLP v. Van Winkelhof (overturning a decision of the Court of Appeal) held that partners were “workers” and therefore legislation protecting whistleblowers applies to partners in the same way that it applies to employees.
UK Whistleblowing – tips on the rise and the possibility of bounty
Whistleblowing tips reported to the Financial Conduct Authority (the “FCA”), one of the UK bodies with responsibility for regulating the financial services industry, have increased 35 per cent in the past 12 months according to information received by Kroll. Kroll found that between November 2012 and October 2013, the FCA received 5,150 whistleblowing reports to its helpline compared to 3,813 in the same period in the previous year.
Whistleblowing in the UK – the latest developments and a review of the law
In recent months, the UK has seen a growing focus on the protection afforded to whistleblowers. This attention has emerged because of recurring question linking diverse scandals, such as phone hacking and those that have hit the health service and the banking sector: namely, would a different system to encourage and protect whistleblowers have mitigated or even avoided the problems that have emerged.