SEC pushes program for whistleblowers

MANILA, Philippines — The Securities and Exchange Commission (SEC) is coming out with a whistleblower protection program in an effort to strengthen its enforcement against investment scams, predatory lending practices, money laundering, terrorist financing, market abuse, disclosure violations and other illegal acts.

The SEC has issued for public comment a draft memorandum circular providing guidelines on a whistleblower protection program that safeguards individuals who report such anomalies.

The commission said the move is part of its contribution to corporate integrity and the country’s broader anti-corruption and transparency efforts under the United Nations Convention Against Corruption and in coordination with initiatives of the Department of Finance.

“Through the issuance of these whistleblower protection guidelines, we seek to empower victims, market participants and concerned citizens to come forward without fear, report violations of corporate and securities laws, from scams to complex misconduct such as insider trading and failures to disclose beneficial ownership, and join us in our fight against illicit activities that harm financial consumers and erode confidence in our markets,” SEC chairman Francis Lim said.

He said financial consumers, investors and corporate insiders all play a vital role in safeguarding the integrity of the financial and corporate sectors, noting that their willingness to expose wrongdoings forms part of the country’s defense against fraud, market abuse, failures in disclosure and other illegal acts.

A whistleblower is defined by the SEC as any person who provides truthful information relating to a reportable act or omission to the commission.

Reportable acts or omissions cover any offense or violation under the Revised Corporation Code, including the unauthorized use of corporate name, violation of the disqualification provision for directors, willful certification of incomplete, false or misleading statements or reports and fraudulent conduct of business, among others.

Whistleblowers may also report on other laws and regulations implemented by the SEC, the Securities Regulation Code, the Financial Products and Services Consumer Protection Act and the Lending Company Regulation Act of 2007, among others.

According to the commission, this means whistleblowers can report not only obvious scams, but also highly sophisticated violations such as insider trading, market manipulation and failure to disclose accurate beneficial ownership information.

The draft guidelines primarily ensure that whistleblowers are protected from retaliation, while providing clear and accessible ways to file reports with the SEC.

The SEC said that it will process anonymous reports or complaints only if the information provided pertains to verifiable leads through other means like checking of corporate records, in which case, the subject of such reports or complaints may be required to provide a comment.

It said that anonymous reports should clearly identify the respondents by disclosing the corporation’s corporate name and address.

Further, the alleged violations, actions, and/or omissions must be clearly identified, together with the law, rule and regulations allegedly violated.

The SEC said that a whistleblower who files a report anonymously may choose to provide a manner by which he or she can be contacted, which the commission shall keep confidential in accordance with the law.

The draft guidelines likewise provide the designation of a Whistleblowing Office, which will take charge of receiving and managing whistleblowing reports and overseeing the implementation of whistleblower protection measures.

The office will assess the credibility of the reporting source, the quality of the evidence provided and evaluate whether the reported issue involves significant public interest or potential harm.

Measures will also be implemented by the SEC to protect whistleblowers from retaliation or adverse actions, which includes ensuring job security and providing support mechanisms.

Anti-retaliation measures may also include prohibitions on dismissal or demotion. The SEC could also provide counseling or legal assistance.

The public are given until Dec. 11, 2025 to submit their comments on the proposed draft guidelines.