UAE’s new whistleblowing regime ‘significant and positive’ step for employees

Employees, officers or agents of DFSA-regulated companies operating in or from the DIFC can now withhold their identities when reporting suspected misconduct either internally or externally to their auditor, the DFSA or a law enforcement agency. DFSA-regulated firms must also protect whistleblowers from any detrimental impact that reporting misconduct could cause, up to and including employment dismissal.

The protection only applies, however, when the information provided by a whistleblower creates a “reasonable suspicion” that a regulated entity, or an officer or employee of the regulated entity, has breached legislation administered by the DFSA or engaged in money laundering, fraud or another financial crime. The disclosure must also be made in “good faith”

Ruth Stephen, employment law expert at Pinsent Masons, said: “Employees can now file disclosures anonymously which goes further to bolster the protection that employees will be afforded against suffering any detriment or dismissal in response to making a disclosure in good faith.”

Seema Bono, dispute resolution and compliance expert at Pinsent Masons, said: “The new regime is significant and positive and takes the DIFC and the UAE further in the journey to create an environment of transparency and accountability.”

DFSA-regulated firms are required to operate appropriate and effective policies for reporting and assessing regulatory concerns, including internal arrangements to allow whistleblowers to come forward and escalate misconduct reports internally and to the DFSA or relevant authority if necessary. Each firm must implement measures to protect the identity of the whistleblower and against them suffering any detriment or dismissal and provide feedback to whistleblowers of how it will manage any conflicts of interest and the fair treatment of individuals accused of misconduct. Additionally, employers must inform all employees of the protections now available to them.

Employment law expert Tareq Toubassi said: “For employers regulated by the DFSA, these changes introduced by the Regulatory Law add an additional layer of obligation. They must now have in place approved and effective policies to facilitate reporting of regulatory concerns and also keep a record of the details of all whistleblower reports together with the employer’s assessment and decision outcome.”

Bono said: “The introduction of the new whistleblowing regime by the DFSA underscores the importance of establishing a culture of whistleblowing and effective communication channels to identify compliance and misconduct issues within a business as early as possible. Whether a concern is legitimate and justifies a detailed factual and forensic investigation will need to be decided on a case-by-case basis.”

“Ultimately, businesses need to ensure that they have adequate and clear investigations protocols and guidance in place, and that any whistleblower concerns are triaged and escalated, as necessary,” she said.

The DFSA has set up a confidential whistleblowing email address where concerns can be reported directly to the regulator: [email protected]. The DFSA will not, however, provide any legal advice or guidance to people who wish to make a disclosure.