• Friday, April 12, 2024

Business

FCA orders banks, insurers to report sexism, bullying cases

FCA said on Wednesday (14) it had sent Section 165 notices

Nikhil Rathi, CEO, Financial Conduct Authority

By: Pramod Thomas

BRITAIN’s markets watchdog has ordered more than 1,000 banks, insurers and brokerages to report how many sexual harassment, discrimination and other non-financial misconduct cases they have recorded since 2021 and how they have dealt with them.

The Financial Conduct Authority (FCA) promised lawmakers in January it would investigate how financial services companies deal with such misconduct amid complaints from victims that they are often silenced or forced to quit.

The view that London’s financial sector remains an “old boys club” in which perpetrators of abuse operate with apparent impunity became more widespread after sexual assault and misconduct allegations against hedge fund founder Crispin Odey and Confederation of British Industry (CBI) officials last year.

Odey has denied wrongdoing, but his hedge fund closed. The CBI said it had dismissed a small number of staff who had failed to meet “high standards of conduct”.

The FCA said on Wednesday (14) it had sent Section 165 notices – under which it has the power to compel firms to produce information – to 184 investment banks, 217 commercial insurers, 349 insurance intermediaries and 288 wholesale brokers.

A failure to respond could lead to a public censure, a fine or a search of the premises. The notice also means that firms can comply even if they have signed non-disclosure agreements (NDAs), one lawyer noted.

The FCA wants high-level data for the number of non-financial misconduct incidents since 2021, how they were detected and the outcomes, including any NDAs and employment tribunal hearings, so it has a better view of the problem.

It is also asking for the number of cases involving senior managers and where incidents took place: at the office, working from home, working offsite or in work-related social situations.

In the notice to Lloyd’s of London, its insurance managing agents and intermediaries, the FCA said the wholesale insurance market had a “long way to go in having an inclusive culture” and asked for a response by March 5.

Lloyd’s, which regulates non-financial misconduct amongst its ranks, has previously acknowledged problems with sexual harassment and day-time drinking in the commercial market, which employs nearly 50,000 people.

“Lloyd’s is working with the FCA to support the survey and our market’s responses,” a spokesperson said.

Lawmakers have said they were appalled by the scale of the problem in finance after 40 women from 30 financial firms told them anonymously about how victims typically are forced to move teams, leave or are silenced with NDAs.

The FCA, which has said non-financial misconduct is relevant when considering whether people are “fit and proper” to work in finance, has said it might publish some aggregated data but will ensure that individual firms cannot be identified.

(Reuters)

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