The Autorité des marchés financiers (AMF) on Thursday announced it has decided not to offer financial rewards to whistleblowers who report violations of the laws administered by the Quebec regulator.
After closely monitoring whistleblower programs in other jurisdictions — including the U.S., which does pay rewards, and the U.K. and Australia, which do not — the AMF has concluded that there’s no definitive evidence that paying rewards generates better quality tips.
“The study’s findings showed that it cannot be established with certainty, based on specific data, that a financial incentive generates more quality whistleblowing,” the AMF says in a statement.
The AMF says its research shows that confidentiality is the primary motivation for whistleblowers to report possible misconduct.
“We are convinced that this protection, combined with anti-retaliation measures, as part of a structured, well-publicized program, will have a definite impact on the quantity and quality of wrongdoing reports made to the AMF, without the need for a reward,” says Jean-François Fortin, executive director of enforcement at the AMF.
The AMF intends to promote its whistleblower program in the coming months that focuses on ensuring confidentiality. To this end, it says that it intends to implement a secure communication channel that can be used to transmit information to a dedicated team trained to handle whistleblower tips. Additionally, the anti-retaliation protection for whistleblowers in financial sector legislation “will eventually strengthen the effectiveness” of its whistleblower program, the AMF says.
“Our no-rewards approach also corresponds to that adopted by other regulators and organizations around the world and in Quebec that have set up whistleblower lines,” adds Fortin.
So far, the Ontario Securities Commission (OSC) is the only securities regulator in Canada that has decided to pursue a whistleblower program that pays rewards. The OSC’s program has yet to be implemented, and its most recent proposal went out for comment last year.