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SEBI norms to reward whistle blowers
Why is it in the news?
- The Securities and Exchange Board of India has proposed rules that will allow employees to expose fraud and wrongdoing in a company and get a reward for it.
More in the news
- The company employees are likely to be acquainted with the devilry of the management or the promoters.
- Hence certain routes need to be established through which such irregularities may be exposed.
- Proposals by SEBI:(1) The entities that come forward with such information will have to disclose the source of information and give an undertaking that such information has not been sourced from any regulator.(2) If such information leads to a final order by SEBI with a minimum disgorgement of ₹5 crore, then a monetary award of 10% of the money collected by SEBI, subject to a cap of ₹1 crore, can be given to the informant.(3) The reward will be paid from the Investor Protection and Education Fund (IPEF).(4) SEBI also plans to establish an Office of Informant Protection, which will be independent of the investigation and inspection wings of the regulatory body.(5) Also, an anonymous complaint can be submitted through an authorised representative who is a practising advocate.
Source
The Hindu.