Sri Lanka’s stock market, which has lost significant value during the last couple of years, is now on a mission to rebuild investor confidence by clamping down on market manipulation with the help of whistleblowers.
The Colombo Stock Exchange (CSE) is now hosting a page on its official website inviting tips and information on market manipulation and violations from whistleblowers. The CSE assures that the identity and confidentiality of the information provided by the whistleblowers will be treated with utmost confidentiality.
“This section intends to invite information and tips related to market manipulation and violations. The Colombo Stock Exchange will treat all tips and information received under this section as confidential and will not disclose such information to any third party unless required by any applicable statute, regulation or by the order of a court of law,” the CSE’s ‘Submit a tip’ web page noted. Corporate whistleblowing is a widely used form of exposing any kind of information, activity that is deemed illegal, unethical or which is not correct with the organisation’s code of conduct— private or public. Some organisations have gone into the extent to establishing whistleblower hotlines.
Whistleblowers are generally protected through witness protection laws in many jurisdictions. But Sri Lanka still does not have witness protection laws.
This is one of many measures which are in the pipeline by the CSE and Securities and Exchange Commission (SEC) to crackdown on the alleged market manipulation activities, which eroded confidence in the market during the post-war bull run during 2010-2011.
During this period, many ill-informed first-time investors lost their hard-earned moneys by investing in the CSE and they still keep away from the market despite some of the corrective measures taken by the authorities.
Meanwhile, the SEC is also planning to establish a new surveillance system to crackdown on some websites, which manipulate stock prices operating both within and outside the country.
Sri Lanka’s stock market was down by 0.48 percent by April 5 after losing 9.66 percent and 5.54 percent in value during 2016 and 2015. But net foreign buying up to April 5, this year, stood at Rs.6.1 billion.