Investor-driven surveillance changes stock market atmosphere

The atmosphere at the Nigerian stock market is in for a change following Monday’s decision by the Nigerian Stock Exchange (NSE) to offer the investing public a responsibility to confidentially disclose – via a secured online portal – violations of any rule, regulation or law within the stock market.

The categories of matters than can be reported are exhaustive. They include but are not limited to market abuse,financial fraud, and undeclared conflict of interest.

As a Self-Regulatory Organisation (SRO), the NSE 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”.

In the past four years (since 2010), the United States SEC has offered its investing publics this kind of opportunity, which is a mechanism for providing information not available to the regulators to take requisite action.

This ‘whistle-blowing’ responsibility now offers any member of the public – 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 – direct access to a control mechanism (NSE CEO office, legal and regulations division, and market surveillance department) on violation or potential violation of any rule regarding the capital market.

In recognition that whistleblowing 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 whistleblower chooses not to disclose his identity, the Exchange will not know who he is. If the whistleblower 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, Nigerian Stock Exchange.

“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,” Awe said 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.

IHEANYI NWACHUKWU