The Securities and Exchange Communion of Pakistan (SECP) will direct the boards of listed companies and public sector companies to formulate a 'whistle blowing' policy for all its employees to expose violations/contraventions committed in the companies. In this regard, the SECP has proposed Whistle Blowing Regulations, 2017 through an SRO No 349(I)/2017 here on Tuesday.
These draft regulations shall apply to the person or persons who alone or jointly, provides/provide the Commission with information regarding a contravention or intended contravention of the laws administered by the Commission. According to the regulations, the Commission has highlighted conduct of company or regulated person with regard to whistle blowing. The board of a listed company, public sector company or regulated persons shall formulate a whistle blowing policy; communicate the policy to all employees and place the same on the website of the company and ensure that all protected disclosure shall be evaluated objectively.
They would ensure that the whistle blowers are protected from retaliation or discrimination subsequent to a protected disclosure. No company or regulated person shall take action to impede an individual from communicating directly with the commission about a possible violation, including enforcing or threatening to enforce, under a confidentiality agreement.
About the conduct of whistleblower, the SECP regulations said that whistleblower shall act in good faith and have reasonable grounds to suspect that the protected disclosure indicates that the company or regulated person has contravened or intends to contravene any administered legislation. He would be refrained from making false accusations.
The abusive use of the whistle blowing mechanism or submission of false, fraudulent or meritless information may render whistleblower liable to disciplinary action by the company in case of an employee of the company and/ or penal action by the Commission in case of a company or regulated person for misstatement under the ordinance. Where a complaint is made in good faith and reasonably believed to be true by the complainant, no action will be taken against him/her if the allegation is found to be inaccurate or untrue upon enquiry. Provided that the Commission shall be the final authority to decide whether a complaint is made in good faith and without any fraudulent or malicious motives.
The SECP said that no company or regulated person shall take action to impede an individual from communicating directly with the Commission about a possible violation, including enforcing or threatening to enforce, under a confidentiality agreement. The company, its board of directors, audit committee or management shall ensure that no whistleblower, if he/she is an employee/former employee, is subject to any adverse action, the SECP said.
If any whistleblower is being victimised on the grounds that he has lawfully provided information or made a disclosure to the Commission in accordance with the regulations or assisted in any action taken by the Commission based on or related to such information, he may file an application in Form "B" before the Commission seeking remedy in the matter and the Commission may direct by an order in writing, the SECP said.
The whistleblower may contact the Commission directly to reveal information on the violations, but without necessarily disclosing his / her name, if the whistleblower is hesitant to reveal his/her identity through online submission of Form-A on Commission's website or email; postal address; or fax line. The Commission shall communicate directly with the whistleblower regarding the protected disclosure, without seeking the consent of the company. All protected disclosures made to the Commission will remain confidential if the whistleblowers desire so.
The Commission may require that the company or regulated person or their employees to furnish information or produce documents relevant to the protected disclosure without disclosing the identity of the whistleblower. If the Commission is of the opinion that the company or its employees has/have failed to furnish any document, paper or information which was required by the Commission, it may after affording an opportunity of being heard, make any of the orders including impose penalty as provided under section 40A of the act; and/ or issue directions and interim orders as may be deemed appropriate by the Commission, the SECP said.
Any information of alleged violations shall not come under the scope of these Regulations which is more than six years old starting from the date on which the alleged violation occurred; or more than 3 years old starting from the date when the facts material to the right of action are known or reasonably should have been known to the whistleblower regarding alleged violation, the SECP added. The regulations neither provide amnesty/protection to whistleblowers nor preclude the Commission from bringing an action against such whistleblower for his/her conduct in connection with violations of the applicable laws, if any.