A bill setting out procedures for investigating complaints and protecting whistleblowers who report to the Cyprus Securities and Exchange Commission (CySEC) is currently before the House finance committee.
A representative of the finance ministry explained on Monday that the bill transposes an EU implementing directive into national law, concerning procedures for submitting reports to CySEC related to market abuse.
The EU directive dates back to 2015. So far, the handling of such complaints had been regulated through a CySEC circular governing procedural matters, whereas the issue is now being addressed through legislation.
Secure comminucation channels
It was noted that the broader framework for the protection of persons reporting breaches is covered by a 2022 law. Following a previous request by the finance committee, the finance ministry and the legal service submitted an explanatory note clarifying that while the 2022 law applies generally, sector-specific obligations arising from other EU acts – such as the directive in question – continue to apply as special provisions.
The bill provides for the establishment of secure communication channels, procedures for following up reports, protection of the whistleblower’s identity, as well as information and assistance for whistleblowers who may face retaliation.
Protecting whistleblowers
However, a representative of the labour ministry expressed disagreement with the explicit reference to the labour department as the competent authority responsible for protecting whistleblowers. He argued that, given the broad scope of the directive regarding what may be reported and how whistleblowers should be protected, there should be no specific naming of the labour department in the legislation.
A representative of the legal service said that both the EU implementing directive and the bill provide for cooperation between CySEC and any relevant authority responsible for the protection of employees, whether the individual involved is the reporting person or the reported party. “It is not possible to exhaustively define which authority is relevant in each case,” he said. He added, however, that discussions with the competent authorities showed that various departments within the labour ministry have a statutory role in this area, which is why it was considered appropriate to include the labour department’s competence in the bill.