Information on report of sexual misconduct - September 2023

I would like to know for 2019, 2020, 2021, 2022 and 2023:
 
1.  How many reports you received of sexual misconduct?
2.  Whether each individual contacted you on an anonymous, confidential, or self-identified basis?
3.  A brief summary of the types of concerns raised broken down by percentage or numerically?
4.  Whether the reports led to an investigation, no action, or further action (i.e. regulatory sanction or other enforcement action) broken down by percentage or numerically?

Before responding to your request, we would like to explain that the FCA remains focused on improving the culture of the firms it regulates, assuring the fitness and propriety of those firms’ senior managers and requiring firms to properly assess the fitness and propriety of their certified staff.

The vast majority of firms we regulate understand that we consider non-financial misconduct relevant to assessments of fitness and propriety, and that non-financial misconduct can amount to a breach of our conduct rules.

Should allegations or evidence of non-financial misconduct come to light, we expect a regulated firm to take them seriously through appropriate internal procedures. We can investigate and act against authorised firms that fail in this regard for inadequate systems and controls, and whether someone is failing to meet our fitness and propriety requirements based on evidence of non-financial misconduct.

Turning now to the information you have requested, reports of ‘sexual misconduct’ can be made to either our Supervision Hub or our Whistleblowing team.

Reports made to our Supervision Hub

The Supervision Hub has no specific category for logging cases under ‘sexual misconduct’. We have, therefore, run a key word search on our system for ‘sexual misconduct’ and can confirm there were 4 cases recorded that contain a reference to ‘sexual misconduct’. We are, however, exempted from providing a yearly breakdown for question 1 or any further information for questions 2, 3 and 4 under section 40 (personal data) of FOIA. This is because where the numbers are low, there is a risk that individuals could be identified, and their personal data disclosed. Please see Annex A below for details.

Reports made to Whistleblowing team

For question 1, our Whistleblowing team do not have a whistleblowing allegation category entitled “sexual misconduct”, but they do have a category called ‘sexual harassment’. We have therefore provided below the number of allegations we have received in the category ‘sexual harassment’:

For question 2, all whistleblowing reports are handled confidentially. Where whistleblowers provide us with their personal details, these will be held only by the Whistleblowing Team and will not be shared with other FCA teams. We have provided data about the number of whistleblowers who have provided contact details, and those that chose to remain anonymous:

For question 3, we do not break down the allegation category “sexual harassment” any further and therefore cannot provide further detail.

For question 4, when we close a whistleblowing case, we use the following definitions of grades A-C:

Grade A -Intelligence directly contributed to FCA enforcement activity or the protection of consumers through other intervention.

Grade B -Intelligence was of significant value to the FCA and contributed to the discharge of its functions

Grade C -Intelligence was, or may be, of value to the FCA but is not currently actionable or does not meet current regulatory risk thresholds.

The below table provides details of the number of whistleblowing cases as listed above in question 1, which when closed have led to significant action (grade A) or action (grade B). We have also included C grade cases (cases that are graded C when closed did not lead to any specific action, e.g., supervisory action did not involve contact being made with the firm and / or a third party).

We have provided the number of cases graded A and B combined, as we consider disclosure of which grade was applied could result in the identification of the whistleblowers involved and so section 40 (personal information) applies. Please again refer to Annex A for full details as to why this exemption applies.

Cases are only graded when they are closed. Ongoing cases still subject to review and/or investigation are not graded. The grades are for cases that have been opened and closed on/after dates provided above (i.e., a case opened in 2019 may have been closed in a subsequent year).

It is worth noting that the grades above relate to cases, not individual allegations. Cases often contain multiple allegations of different types. A sexual harassment allegation could be recorded alongside other allegation types. The final grade relates to the whole case, not to a specific allegation.

Further, we would also like to explain that because the opening of an enforcement case is based on a wide variety of factors, there is not necessarily a direct link between a received report or complaint, and the opening of a case. We therefore do not hold the information you have requested in relation to whether the reports made in connection with reports made via our supervision hub resulted in enforcement action.

To be helpful, however, we can confirm that in the last five years, we have opened 5 enforcement cases relating to non-financial misconduct. Of these, 1 case which has closed concerned alleged sexual misconduct.

Please note that where we have not taken formal Enforcement action, we may have taken alternative action, e.g., supervisory action, which could include contact being made with the firm and/or a third party. More information on our approach can be found here[1].