Are you among those who believe that recent activities in the stock market question the whereabouts of laws governing operations in the market? Have you in the past tried to get your views across to those that matter in the market but your efforts were limited?
Do you know of any form of market related fraud or abuse that happened or is about to happen that will affect the confidence instilled in the stock market? Are you in the broker dealer community, shareholders’ associations, employees and directors of listed companies, employees and directors of capital market operators, the media, auditors and reporting accountants, and staff of regulatory bodies?
Now, you have an opportunity to the blow the whistle that is meant to attract the attention of the Self Regulatory Organisation (SRO) and your disclosures be investigated, while your identification is protected within the ambit of the law.
This comes with recent launch by the Nigerian Stock Exchange (NSE) of its X-Whistle, which is a secure, on-line portal through which information can be disclosed to the Exchange.
The portal also permits you to disclose information – that is the whistle-blower to perform a status check on the matters you have reported on X-Whistle.
For those among us in the market whose comments and complaints are always aimed at rattling the market… from what INVESTOR learnt, sorry, this platform will not serve your aim, as it is not a platform for personal vendetta.
The categories of matters that can be reported via X-Whistle are not exhaustive. They include but not limited to: market abuse; financial fraud, and undeclared conflicts of interest.
Whistle blowing is the act of disclosing a violation of any rule, regulation or law to an authority that has supervisory or regulatory authority, and has the responsibility to take action to impose sanctions against such violation.
We should encourage whistle blowing because it provides a mechanism for providing information that is not available to the Exchange, so that the Exchange can take requisite action. If the Exchange is not aware that violations have occurred, are occurring or about to occur, it cannot take appropriate action. Action taken on such information leads to the promotion of investor confidence in the capital market.
As a Self-Regulatory Organisation, the NSE says it recognises that symmetric communication is vital and has committed to reverting to the public, on an annual basis, the outcome of investigations resulting from public complaints via the online portal called “X-Whistle.”
This initiative has been existing in the past four years (since 2010), in the United States where the US SEC offers its investing public the mechanism to provide information not available to the regulators to take requisite action.
In recognition that whistle-blowing is rare in the market – because a member of the public who has requisite information may not feel sufficiently protected to provide such information for fear of reprisals from those actively involved in the matters about which they have knowledge – the NSE has committed to maintain confidentiality to the extent possible within the limitations of law and policy and the legitimate requirements of investigation.
“If the whistle-blower chooses not to disclose his identity, the Exchange will not know who he is. If the whistle-blower discloses his identity, the Exchange will only disclose it in circumstances where the law or policy mandates it to do so,” said Tinu Awe, head, legal and regulation division, NSE.
“The system gives you the opportunity to remain anonymous. Our general policy is to keep information received via the portal confidential, unless mandated by law or policy reasons. It is something that we think the investing public wants because they have stake in this market,” according to Awe, while introducing the platform to the media.
She further said it was an initiative they believe would go a long way to bring information to the Exchange because “the market thrives on information.
“Upon receipt of the information, we will conduct within five working days a preliminary analysis to confirm whether there is a breach or potential breach of capital market laws, rules, or regulations. If an investigation is commenced, the nature and complexity of the matters under investigation will dictate the timeframe. However, we have a feedback mechanism where a whistle-blower can independently monitor the status of his tips or referrals. It is not a platform for vendetta.”
She observed that it was the right of the investing public to know what kind of company they were investing in, activities of stockbrokers around the company they had stake, or actions of board members that they felt violated the capital market rules, regulations and laws.
It is also good you understand that a whistle-blower is different from a complainant. You may ask why? It is because a whistle-blower is not usually directly or personally affected by the matters reported.
Consequently, the whistle-blower rarely has a personal interest in the outcome of any investigation into violations disclosed. As a result, the whistle-blower is not expected to prove his or her case, rather he or she raises the concern so others can address it.
This is different from a complaint. A complainant is personally affected by the matter he or she has raised. Therefore, a complainant has a vested interest in the outcome of the complaint.
Iheanyi Nwachukwu
