Banks and brokers next in line as FCA launches harassment crackdown
Banks and brokers will be hit with a host of questions on how they deal with issues such as sexual harassment, bullying and discrimination next week, Financial News has learned, as the Financial Conduct Authority kicks off its crackdown on so-called non-financial misconduct.
Wholesale insurance firms and intermediaries were asked to provide three different data points in a letter sent on 6 February by the regulator: how many and what type of incidents have been recorded, and whether these came from whistleblowing or other means; whether complaints led to a warning, dismissal or no action; and whether non-disclosure agreements or employment tribunals followed.
The data must cover the past three years and note where senior managers were involved.
The FCA has met with a number of industry groups in recent weeks to discuss the surveys it will send out to firms, according to individuals present.
The regulator flagged its proposed three-question approach, with a four-week response time to deliver three years’ worth of data, the individuals said, confirming its intention not to seek detailed information on specific allegations or investigations.
An FCA spokesperson said: “We can confirm that we have written to wholesale insurers and wholesale insurance intermediaries, asking them to provide information about instances of non-financial misconduct. We will be extending our survey to wholesale banks and brokers next week.
“This work is intended to support the FCA’s understanding of the types and instances of non-financial misconduct firms are seeing and how they are handling it.”
READ Revealed: FCA investigates bullying, harassment, sexual misconduct claims
The survey is being sent to all sectors in a staggered way for administrative reasons, according to a person familiar with the situation. It comes in the wake of a host of scandals in the City in recent years, including the allegations that brought down hedge fund mogul Crispin Odey, which he denies.
FN revealed last April that the regulator had received nearly 200 allegations of non-financial misconduct over the previous two years. It had four investigations running at the time.
The letter sent to Lloyd’s of London managing agents, London market insurers and intermediaries comes after Atrium Underwriters was fined £1m in 2022 for “serious failures” that allowed discrimination, harassment and bullying to go unchecked.
“Non-financial misconduct is misconduct and not an additional principle,” the letter reads.
The FCA wants data to include incidents that occurred at the office, but also while working from home, working offsite, or during social situations related to work. The survey is compulsory.
“Should allegations or evidence of non-financial misconduct become known, we expect a regulated firm to take them seriously, have the internal procedures to investigate them promptly and fairly, and to take appropriate action when allegations are upheld,” the letter adds.
“We understand that not all allegations will be substantiated and that a higher volume of allegations collected by a firm is not necessarily indicative of a worse environment. We recognise that a high volume of incidents could, for example indicate that there is an effective and transparent speaking up culture within a firm. Conversely, where a firm is reporting nil-returns or a low volume of incidents, this isn’t necessarily an indication of an environment that is working well.”
To contact the author of this story with feedback or news, email Justin Cash
