UK - The Financial Services Authority (FSA) said it will bring in new rules under the forthcoming Financial Services and Markets Act if companies do not install internal whilstleblowing procedures to help prevent future "Maxwell-type" behaviour.
Speaking at the Securities Houses Compliance Officers Group conference Financial Services Authority (FSA) chairman Howard Davies discussed lessons learnt from the Maxwell Affair and its impact on regulation of the City. It is nearly 10 years since the death of Robert Maxwell, who plundered around £450m of pensioners’ money.
“The upcoming tenth anniversary of Robert Maxwell’s death has stimulated debate as to whether the City is now a cleaner place and whether the new regulatory system will be better able to respond to the challenges posed by an individual determined to circumvent rules and controls,” said Davies
Davies, who referred to recommendations in the DTI Inspectors report published earlier this year, said that the FSA was “serious about expecting firms to put internal whistleblowing procedures into place and won’t hesitate to consider making rules under the FSM Act if the guidance we plan to issue in the New Year does not lead to the higher standards... .”
He also tried to allay employee fears, adding firms that penalised an employee who has made a disclosure “could call into question the fitness and propriety of the firm concerned and/or relevant members of the firm's staff.”
Davies also drew attention to other key DTI recommendations including communication between regulators; the FSA’s production of guidance for advisers; and the need for firm’s to ensure the suitability of staff.
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