FCA: NDAs should not deter whistleblowers from reporting non-financial misconduct

investmentweek.co.uk:

Sarah Pritchard (pictured), is the FCA's executive director of supervision, policy and competition for markets.

During the last hearing of the Treasury Select Committee's Sexism in the City inquiry on Wednesday (17 January), FCA executives responded to concerns about use of NDAs during incidents of bullying and sexual harassment to silence victims and protect the perpetrators. 

Sarah Pritchard, executive director of supervision, policy and competition at the FCA, told MPs the regulator would soon begin to ask wholesale banks, wholesale insurers and brokers for data on the number of complaints of non-financial misconduct in their firms, as well as how these cases were resolved.

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«If we see, for example, use of NDAs alongside non-financial misconduct coming through that data, we will be able to take that into account in our future supervisory work,» she said. 

«We will, through our proposals, have much better visibility of non-financial misconduct regardless of whether an NDA is used. An NDA will not prevent any notifications through to the regulator.»

Pritchard said that while there are «a number of valid reasons» why an entity might use NDAs to keep commercial terms confidential in a settlement, she said the FCA «would not expect» an NDA to be used to prevent individuals from raising concerns of bullying, harassment or sexual misconduct.

«Our future proposals are not NDA-specific, but our future proposals make it very clear that where disciplinary action is taken for non-financial misconduct, firms are obliged to report that to us,» she added. 

FCA chief executive Nikhil Rathi told MPs that, as the regulator considers the responses to its D&I and