The Financial Conduct Authority has ordered more than 1,000 banks, insurance firms and brokerages to report how many sexual harassment, discrimination and other non-financial misconduct cases they have recorded since 2021.
In January the FCA told MPs about several cases of sexual harassment and misconduct in the finance sector it had become involved in. It also spelt out the limited nature of its powers and promised to finalise its investigation of the issue by the middle of this year.
As part of its investigation, this week the watchdog sent Section 165 notices – under which firms are compelled 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 should comply even if they have signed non-disclosure agreements.
Sexual harassment
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The FCA is seeking to gain insights into the extent of misconduct in the City; it wants data on detection of incidents and outcomes including any NDAs and employment tribunal hearings.
It wants to gauge the involvement of senior managers and learn more about the locations of incidents – whether they took place at the office, while working from home, working offsite or in social situations.
The evidence heard by MPs suggests that the financial sector remains an “old boys club” in which perpetrators of abuse operate with apparent impunity. The accusations of sexual assault against hedge fund founder Crispin Odey and Confederation of British Industry officials last year were the most prominent recent cases, but organisations such as Lloyd’s of London have been grappling with allegations and behaviour problems for years.
The FCA’s Section 165 notice sent to Lloyd’s said the wholesale insurance market had a “long way to go in having an inclusive culture” and asked for a response by 5 March.
A spokesperson for Lloyd’s said the organisation was “working with the FCA to support the survey and our market’s responses,” a spokesperson said.
In 2019, Lloyd’s vowed to tackle its male-dominated culture after one in 12 workers said they had witnessed sexual harassment.
Last November, about 40 women from 30 financial services companies met with the Treasury Committee to share their personal experiences of sexism and misogyny anonymously.
In a summary of discussions published by the committee on 17 January, most attendees said they had directly experienced sexual harassment or knew of colleagues who had. But those who had experienced misconduct said they often did not report it because they feared they may have to move teams or leave the business.
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