Government and Policy

Whistleblowers to Get 5 Million Shillings Reward, CMA

BY Jane Muia · June 7, 2022 11:06 am

The capital markets Authority (CMA) will reward whistleblowers who expose capital market malpractices with up to 5 million shillings, as was proposed in amendments to the CMA Act in 2018, aimed at taming economic malpractices.

“Where CMA successfully recovers penalties and illicit gains in the capital markets, whistleblowers shall be eligible to a reward of 3 percent of the amount recovered subject to a maximum reward of Sh5 million in line with Section 18 (2A) (b) of the Capital Markets Act and the Whistleblower Regulations,” CMA chief executive officer Wycliffe Shamiah said.

According to The Capital Markets (Whistleblower) Regulations 2022, the informer will be rewarded 90 days after the amount lost is recovered. The remainder of the funds recaptured will be transferred and held in the investor compensation fund.

CMA launched a whistleblower portal in July 2016, hoping that the public would use it to report irregularities in the capital markets, including share price manipulation, insider trading, and breach of governance code. This reward is, however, not eligible for CMA officers.

ALSO READ: US Dollar Shortage in Kenya Means Job Losses for Thousands of Kenyans

“A reward shall not be payable to a whistleblower who, at the time he acquired the original information submitted to the authority, is or was a member, officer, or employee of any government or any self-regulatory entity that is under an obligation to report any such misconduct or offense,” Reads part of the regulation.

Information provided to the Authority under the Regulations may be released to the Office of the Director of Public Prosecutions or any other regulatory body. However, CMA will implement reasonable measures to protect the identity and information of whistleblowers in line with the Witness Protection Act.

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing orderly, fair, and efficient capital markets in Kenya to promote market integrity and investor confidence.