United Kingdom Parliament Treasury Committee Update: Chair Asks For Assurances On FCA's Treatment Of Whistle-Blowers

13 May 2016

Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, writes to Tracey McDermott, Chief Executive of the Financial Conduct Authority (FCA), for further clarity about what measures it is putting in place to improve its treatment of whistle-blowers, following concerns raised by the SME Alliance.

Chair's comments

Commenting on the correspondence, Mr Tyrie said:

"The FCA recognises that whistle-blowers 'almost always want their information and identity to be protected'. Its treatment of the SME Alliance suggests that it may be neglecting the reasonable needs of whistle-blowers.

In 2013, the Parliamentary Commission on Banking Standards – which I chaired – took evidence on whistle-blowing. The Committee concluded that the FCA 'appeared to show little appreciation of the personal dilemmas that whistle-blowers may face'. Three years later, the regulator appears still not to have grasped what's needed to create an appropriate environment for them.

So I have written again for further assurances that the SME Alliance was treated reasonably. The FCA's rules and practices in this area need to be clear and well understood. This case presents the opportunity to provide that clarity. The Committee expects a full answer."

Background

SME Alliance is a small, not for profit organisation set up to support small and medium-sized enterprises (SMEs) and, in particular, SMEs which have had or are having problems with banks. Its main goal is not to deal with individual cases but to communicate with regulators, authorities and relevant organisations on the collective issues of its members.
On 18 January 2016, representatives of SME Alliance wrote to the Chairman to express concerns that the FCA had betrayed the confidence of whistle-blowers by passing on sensitive information to the subject of their complaints, the high street banks.
On 9 February 2016, the Chairman wrote to Tracey McDermott ( PDF 783 KB) for her response to claims made by the SME Alliance that its representatives have been 'badly compromised' by the passing on of sensitive information to the banks. Mr Tyrie also asked what progress that FCA has made towards implementing the Parliamentary Commission on Banking Standards' recommendation that the FCA encourage a 'significant shift in cultural attitudes towards whistle-blowing'.
On 10 March 2016, Ms McDermott responded ( PDF 2 MB). In the letter, Ms McDermott confirmed that the FCA did not treat the SME Alliance as a whistle-blower and subsequently disclosed some of its information on individual customers with the banks accused of falsifying their records. Her reasons for doing so rest on the SME Alliance not having asked the FCA not to share its information with the bank. It is not clear from Ms McDermott’s letter whether the FCA raised the issue of confidentiality with the SME Alliance when first approached or clarified that it would not be treated as a whistle-blower.

Further information

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