The Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 – Annual Report 2023/24

Published on 30 July 2024

Since April 2017, all ‘Prescribed Persons’ are required to report in writing annually on workers (whistleblowing) disclosures they have received. This report covers the period 1 April 2023 to 31 March 2024.

Introduction

The Bank of England (the Bank), of which the Prudential Regulation Authority (PRA) forms a part, are both Prescribed Persons as defined by Parliament under The Public Interest Disclosure (Prescribed Persons) Order 2014. The role of a prescribed person within the financial sector is to provide workers with an opportunity to make their public interest disclosure to a regulator, rather than their employer.

The Bank highly values the role whistleblowers can play to help us achieve our objectives and ensure that financial services are regulated effectively. Whistleblowing can provide a vital source of information which helps the Bank and PRA to identify risks to the firms we regulate by providing useful insights that we might not otherwise receive.

If you think a firm or individual is involved in wrongdoing within an area we regulate, and you want to report it confidentially, contact the Bank’s whistleblowing team either by email whistleblowing@bankofengland.co.uk, or via our confidential hotline 020 3461 8703. We will assign a dedicated case officer, listen to, and understand your concerns in full and provide advice and guidance to anyone who requires it. We do understand that the decision to disclose information can be difficult for an individual. Be assured that concerns which are raised, personal information, and any future communications will be treated in confidence.

Since April 2017, all ‘Prescribed Persons’ are required to report in writing annually on whistleblowing disclosures they have received. The report must be published within six months of the end of the reporting period and will be placed on our website. The report must contain, without including any information in the report that would identify a worker who has made a disclosure of information, or an employer or other person in respect of whom a disclosure of information has been made -

(a) the number of workers’ disclosures received during the reporting period that the relevant prescribed person reasonably believes are -

(i) qualifying disclosures within the meaning of section 43B of the Employment Rights Act 1996; and

(ii) which fall within the matters in respect of which that person is so prescribed;

(b) the number of those disclosures in relation to which the relevant prescribed person decided during the reporting period to take further action;

(c) a summary of –

(i) the action that the relevant prescribed person has taken during the reporting period in respect of the workers’ disclosures; and

(ii) how workers’ disclosures have impacted on the relevant prescribed person’s ability to perform its functions and meet its objectives during the reporting period;

(d) an explanation of the functions and objectives of the relevant person.

Disclosures

In the period 1 April 2023 to 31 March 2024 inclusive

(a)(i)	We received a total of 240 disclosures that have been subject to assessment against the Public Interest Disclosure Act 1998 (‘PIDA’) and discrete statutory requirements of the Bank and the PRA, to assess whether they are protected disclosures.
(a)(ii)	We reasonably believed that 228 disclosures were protected disclosures within section 43B of the Employment Rights Act 1996 and subject to the Bank’s and PRA’s role as Prescribed Persons. The remaining twelve disclosures were not protected disclosures: Four disclosures related to firms which are not regulated by the PRA or the Bank (two of which are regulated solely by the Financial Conduct Authority (FCA) and the case information was appropriately disseminated. One disclosure related to firms which are regulated by the Bank, but the issues fell outside of the Bank’s or the PRA’s regulatory remit; and Five disclosures related to individuals who do not identify or meet the definition of a whistleblower. Two disclosures lacked sufficient context.
(b)	Regardless of the statutory basis of any disclosures, the information provided through the whistleblowing channel can contain vital information to further supervisory assessments. We therefore provided supervisory colleagues with all disclosures (protected and non-protected) to either consider, or for information purposes.
(c)(i)	All protected disclosures were the subject of supervisory consideration, from which: 155 originated from the FCA; and 64 were provided to both the PRA and FCA. Nine were provided to the PRA but were not disseminated further as the matters reported either did not relate to financial regulation or were unable to be progressed due to insufficient information.
(c)(ii)	Of the 228 protected disclosures that were subject to supervisory consideration: 14 disclosures contributed to significant regulatory or supervisory activity; 55 disclosures provided intelligence, which were of prudential value; 39 disclosures provided intelligence, which was retained for future reference but not currently actionable; and A further 120 disclosures are currently subject to ongoing supervisory assessment.^{footnote [1]} Anonymised examples of the action taken in response to protected disclosures are included at the end of this Report.
(d)	An explanation of the functions and objectives: The Bank of England The Bank of England’s mission is to promote the good of the people of the United Kingdom by maintaining monetary and financial stability. The Bank of England is a prescribed person for: the functioning of clearing houses (including central-counterparties); administrating and overseeing SONIA, including calculation and publication; payment systems and securities settlement systems; the treatment, holding, and issuing of banknotes by the Scottish and Northern Ireland banks authorised to issue banknotes (and their agents); the custody, distribution, and processing of Bank of England banknotes under the Bank of England’s Note Circulation Scheme; and the provision of a services relating to payment services. Bank of England Intelligence and Whistleblowing Team Threadneedle Street, London, EC2R 8AH Tel: 020 3461 8703 Email: whistleblowing@bankofengland.co.uk The Prudential Regulation Authority The PRA regulates and supervises around 1,400 banks, building societies, credit unions, insurers, and major investment firms. The PRA has the general objective to promote the safety and soundness of the firms it regulates. It has a secondary objective to facilitate effective competition between firms and to facilitate the international competitiveness of the UK economy (in particular the financial services sector) and its growth in the medium to long term. In relation to insurers, the PRA has an additional objective, to contribute to securing an appropriate degree of protection for insurance policyholders. The PRA is a prescribed person for matters relating to the carrying on of deposit-taking business, insurance business, or investment business, and the safety and soundness of persons authorised for such purposes. Bank of England Intelligence and Whistleblowing Team Threadneedle Street, London, EC2R 8AH Tel: 020 3461 8703 Email: whistleblowing@bankofengland.co.uk

Appendices

Whistleblowing case examples

The following anonymised examples, which highlight reported concerns and actions taken, are based on cases managed during 2023/24 by the Bank and the PRA’s Whistleblowing Team.

Case Study One
Allegations of sexual misconduct committed against members of staff by a senior manager of a regulated bank. Staff believed they were unable to speak up internally on wrongdoing through fear of detriment. Inadequate whistleblowing channels and internal speak up processes to address staff allegations. By providing a prompt and approachable ‘in confidence’ service for individuals wishing to report instances of wrongdoing, we were able to meet with and support the whistleblower. The whistleblower provided evidence of sexual misconduct against themselves and other members of staff. Whilst respecting the whistleblower’s wishes, the matters were able to be escalated, resulting in an investigation, the result of which was that the senior manager was held accountable for their wrongdoing and dismissed. Supervision will continue to monitor the firm’s plans to establish new and improve its existing reporting channels. A decision to provide confidential information can be difficult. However, wrongdoing can only be acted upon if, someone decides to report it. Whistleblowing disclosures were vital for this case and resulted in the removal of an individual responsible from the firm.
Case Study Two
Concerns that policyholder funds were being misused, and policyholders were not adequately protected. Allegations that the firm invested into a fund known to have liquidity issues which was at risk of being closed. Lack of due regard by key senior managers who approved this investment, despite being aware of the fund’s challenges. The PRA had to take steps to investigate the concerns raised without identifying the whistleblower. References to key issues in board documents were identified which allowed the PRA to probe further with the firm. This provided details of the firm’s due diligence framework for investments and illustrated how this framework was used in the investment decision. The PRA was able to conclude that the overall framework was satisfactory, the due diligence process in this case was thorough and the PRA did not identify poor outcomes for policyholders. When providing disclosures, the whistleblower does not need to be right about their concern nor prove it. They simply need to show that they have some reasonable belief or basis for believing there has been some wrongdoing.
Case Study Three
Concerns of financial sustainability due to poor performance and inadequate governance and controls End of year accounts were not signed off due to liquidity concerns. Fragile solvency position due to unrealistic sales growth projections. Inadequate risk framework which has not considered all risk areas and associated controls. Although the PRA had already identified and was addressing key financial risks through enhanced monitoring, Supervision met with the whistleblower and their information triggered a more in-depth review. Supervision coordinated further meetings with the firm to discuss key risks regarding the long-term sustainability of the current business model and engaged with third party auditors to ensure regulatory concerns on liquidity were appropriately addressed. Supervision reinforced PRA expectations to the firm of implementing realistic and accurate plans and will continue to provide supervisory oversight to ensure remediation and sustainability. Although some information may already be known to the regulators, this case emphasises how whistleblowers can provide important additional information which helps us to identify risks to the firms we regulate.