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Women and Equalities Committee Report on Sexual Harassment in the Workplace

View profile for Lucy Sorell

Megan Butler, Executive Director of Supervision (Investment, Wholesale and Specialists Division) at the FCA has written to Maria Miller MP Chair, Women and Equalities Committee regarding the Women and Equalities Committee Report on Sexual Harassment in the Workplace.

In setting out the FCA’s position, the letter makes a number of key points which financial services firms should consider carefully when building, monitoring and testing their policies and procedures around HR and conduct:

  1. Sexual harassment is misconduct which can drive a poor culture: The regulator’s position is that sexual harassment is viewed as misconduct which falls within the scope of its regulatory remit. Culture in financial services is widely accepted as a key root cause of the major conduct failings that have occurred within the industry in recent history, and the regulator expects firms to foster healthy cultures which support the spirit of regulation in preventing harm to consumers and markets. The FCA will continue to monitor misconduct through its ongoing supervision of firms.
  2. Individual accountability and assessing whether staff are ‘fit and proper’: The Senior Managers and Certification regime ensures that senior executives are directly accountable for functions which fall under their responsibility. This accountability rests with the most senior individuals – Senior Managers within an organisation, because the FCA considers that these are the individuals with the greatest potential to cause harm to a firm’s customers or the markets in which it operates. The FCA should take the appropriate action where a Senior Manager has been involved in misconduct proceedings; and again will continue to be vigilant through its supervision.
  3. Transparency and whistleblowing: The FCA expects firms to have appropriate internal whistleblowing and complaints processes in place – a requirement that it assesses as part of its supervisory activities. Individuals are also able to report instances directly to the FCA.