The financial regulator has announced new rules on whistleblowing to allow bank employees to come forward and flag concerns internally.

The UK's Financial Conduct Authority and Prudential Regulation Authority have introduced new rules aimed at making it easier for people to “blow the whistle” on miscreants in the UK banking industry.

The new rules, which will come into force in September 2016, require firms with over £250 million ($379 million) in assets to put in place internal arrangements to handle all types of whistleblowing disclosures and appoint a senior manager to oversee the effectiveness of these arrangements.

Firms will also be required to educate UK-based employees about the FCA and PRA whistleblowing services, present a report on whistleblowing to the board at least annually and inform the FCA if it loses an employment tribunal with a whistleblower. They will need to put text in settlement agreements explaining that workers have a legal right to blow the whistle. 

“Whistleblowers play an important role in exposing poor practice in firms and they have in the past few years contributed intelligence crucial to action taken against firms and individuals. It is in the interests of the industry and regulators alike that wrongdoing is identified and addressed promptly,” said the FCA's acting chief executive, Tracey McDermott.

“For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies.”