Whistleblowing – A New Must Within The FSA And The Financial Sector

Author:Ms Ileana Glodeanu and Adelina Iftime-Blagean
Profession:Wolf Theiss & Partner


Whistleblowing is the disclosure of information about a perceived wrongdoing in an organization to individuals or entities believed to be able to effect action.

Traditionally, whistleblowing is not regulated exhaustively as concerns private entities neither at European level nor at the level of individual EU countries. Romania has a law applicable to the public sector, being perceived as the first country in the continental legislative system implementing a comprehensive whistleblowing protection act, the scope of which is the protection of the whistleblower against retaliation.

One of the main advantages of implementing a whistleblowing system in a private company is in the ability to identify wrongdoings in their early stages for the purpose of solving them internally, while limiting their negative effect on the public perception of the company.


The legal arrangement set out by Directive 2003/6/EC of the European Parliament and of the Council1 (Market Abuse Directive) governing the functioning of the internal market for financial services was deemed to be less effective in combating market abuse given recent developments in the market and technology. This gave rise to the greater need for a new legislative instrument to ensure that there are uniform rules and clarity of key concepts.

Consequently, Regulation no. 596/2014 on market abuse and repealing Directive 2003/6/EC2 (Market Abuse Regulation or Regulation) has been issued with the aim of contributing in a determining manner to the proper functioning of a genuine internal market, characterized by integrity, efficiency and transparency.

This Regulation establishes a more uniform and considerably stronger framework to preserve market integrity by introducing new regulations and concepts, amongst which whistleblowing arrangements have a significant role. Specifically, the Regulation outlines the importance of preventing and detecting market manipulation and other abusive practices in order to protect the integrity of financial markets; it specifically  emphasizes the need to introduce a system for reporting any violations of the Regulation to the competent authorities.

To this end, Article 32 (1) of the Regulation requires Member States to ensure that competent authorities establish effective mechanisms to enable reporting of actual or potential infringements of this Regulation to those authorities.

At a different...

To continue reading