ASIC Encourages Whistleblowers to "Speak Up" and Publishes Good Practices Report

Thursday, 02/03/2023 | 09:12 GMT by Damian Chmiel
  • The Australian regulator wants to help improve companies' whistleblowing rules.
  • ASIC reminds regulated entities that they are obliged to protect whistleblowers from detriment.
whistle
Finance Magnates

On Thursday, the Australian Securities and Exchange Commission (ASIC ) published a new report regarding whistleblowers' best practices. The Aussie market regulator wants to encourage people to disclose important information that might help identify potential fraudulent activities in the financial markets.

ASIC Wants to Encourage Whistleblowers

In its review of whistleblower programs across various industries, ASIC (as detailed in REP 758) identified effective practices that some entities had implemented. These entities had developed comprehensive and well-publicized measures to safeguard whistleblowers and handle disclosures, which led to the submission of valuable reports and tips about workplace issues and concerns. Consequently, these entities were better equipped to detect and tackle these issues in their early stages.

ASIC will maintain its review of entities' whistleblower policies and procedures for managing disclosures. This includes assessing reports from whistleblowers that claim violations of the whistleblower protections. In instances where significant harm is detected, ASIC will evaluate the entire range of regulatory options available, including civil or criminal enforcement actions, as deemed necessary.

"Whistleblowing is a key part of a transparent, accountable and safe work culture. Whistleblowers need to know that, when they have reasonable grounds to suspect misconduct or an improper situation involving a firm, they can raise the issue without being victimized," Danielle Press, the ASIC Commissioner, commented.

Recently, ASIC commenced legal proceedings against TerraCom Limited for purported whistleblower victimization.

Australian companies must comply with the whistleblower protection provisions introduced in 2019. Since 1 January 2020, public companies, large proprietary companies, and trustees of registrable superannuation entities must establish a whistleblower policy outlining relevant matters and ensure its accessibility to all employees and officers.

ASIC Should Follow SEC Footsteps

The most developed whistleblower program can be found in the US where the Securities and Exchange Commission (SEC) provides high rewards to anyone whose information can help with a financial investigation and detect potential violations.

In the November 2022 report, the SEC said it saw a record number of whistleblower awards in the fiscal year 2022, amounting to $229 million distributed between 103 awards. It was the second-highest year regarding dollar amounts and the number of awards.

"The Whistleblower Program also received a record-high number of whistleblower tips alleging wrongdoing โ€” more than 12,300 whistleblower tips โ€” in the fiscal year 2022," the regulator commented.

The authority has adopted two amendments to incentivize whistleblower tips to boost its program further. The Commission has provided information indicating that the initial modification to the regulations will expand the circumstances under which whistleblowers can receive payment for their contributions and aid in non-SEC proceedings. Secondly, the new amendment has affirmed the authority of the SEC to consider the dollar amount of a potential award for the limited purpose of increasing an award.

On Thursday, the Australian Securities and Exchange Commission (ASIC ) published a new report regarding whistleblowers' best practices. The Aussie market regulator wants to encourage people to disclose important information that might help identify potential fraudulent activities in the financial markets.

ASIC Wants to Encourage Whistleblowers

In its review of whistleblower programs across various industries, ASIC (as detailed in REP 758) identified effective practices that some entities had implemented. These entities had developed comprehensive and well-publicized measures to safeguard whistleblowers and handle disclosures, which led to the submission of valuable reports and tips about workplace issues and concerns. Consequently, these entities were better equipped to detect and tackle these issues in their early stages.

ASIC will maintain its review of entities' whistleblower policies and procedures for managing disclosures. This includes assessing reports from whistleblowers that claim violations of the whistleblower protections. In instances where significant harm is detected, ASIC will evaluate the entire range of regulatory options available, including civil or criminal enforcement actions, as deemed necessary.

"Whistleblowing is a key part of a transparent, accountable and safe work culture. Whistleblowers need to know that, when they have reasonable grounds to suspect misconduct or an improper situation involving a firm, they can raise the issue without being victimized," Danielle Press, the ASIC Commissioner, commented.

Recently, ASIC commenced legal proceedings against TerraCom Limited for purported whistleblower victimization.

Australian companies must comply with the whistleblower protection provisions introduced in 2019. Since 1 January 2020, public companies, large proprietary companies, and trustees of registrable superannuation entities must establish a whistleblower policy outlining relevant matters and ensure its accessibility to all employees and officers.

ASIC Should Follow SEC Footsteps

The most developed whistleblower program can be found in the US where the Securities and Exchange Commission (SEC) provides high rewards to anyone whose information can help with a financial investigation and detect potential violations.

In the November 2022 report, the SEC said it saw a record number of whistleblower awards in the fiscal year 2022, amounting to $229 million distributed between 103 awards. It was the second-highest year regarding dollar amounts and the number of awards.

"The Whistleblower Program also received a record-high number of whistleblower tips alleging wrongdoing โ€” more than 12,300 whistleblower tips โ€” in the fiscal year 2022," the regulator commented.

The authority has adopted two amendments to incentivize whistleblower tips to boost its program further. The Commission has provided information indicating that the initial modification to the regulations will expand the circumstances under which whistleblowers can receive payment for their contributions and aid in non-SEC proceedings. Secondly, the new amendment has affirmed the authority of the SEC to consider the dollar amount of a potential award for the limited purpose of increasing an award.

About the Author: Damian Chmiel
Damian Chmiel
  • 1588 Articles
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About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1588 Articles
  • 35 Followers

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