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Reporting of breaches of legal acts regulating the financial market

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Who should report under this procedure?

Persons engaged in the financial sector or other persons who suspect that their employer, other financial market participants subject to supervision by Lietuvos bankas or other persons have breached legal acts regulating the financial market.

Would the provisions of the Republic of Lithuania Law on the Protection of Whistleblowers apply to the reporting of breaches of legal acts regulating the financial market?

The Republic of Lithuania Law on the Protection of Whistleblowers (hereinafter – the Law on the Protection of Whistleblowers) lays down the rights and obligations of persons reporting breaches at an institution to which they are or have been bound by a service or employment relationship or a contractual relationship, the grounds and forms of their legal protection as well as the measures for the protection, encouragement and support of whistleblowers.

The Prosecutor’s Office of the Republic of Lithuania receives reports laid down in the Law on the Protection of Whistleblowers and performs other functions of the competent authority provided for in this Law.

A report of breaches of legal acts regulating the financial market which complies with the provisions of the Law on the Protection of Whistleblowers (the report is submitted by a person who is or has been bound by a service or employment relationship or a contractual relationship (consultancy, contract, etc.) with a financial market participant or other institution, the report of the breach is submitted in order to protect the public interest, etc.) may be subject to the Law and the reporting person may be recognised as the whistleblower.

A report of breaches of legal acts regulating the financial market may be submitted directly to the Prosecutor’s Office of the Republic of Lithuania. If the Prosecutor’s Office of the Republic of Lithuania found that Lietuvos bankas was authorised to investigate the reported breaches, it would forward the report to Lietuvos bankas together with the decision to recognise the person as a whistleblower or refuse to do so in accordance with the provisions of Article 6(5) of the Law on the Protection of Whistleblowers.

A report complying with the provisions of the Law on the Protection of Whistleblowers may also be submitted to Lietuvos bankas. In this case, Lietuvos bankas would forward the report to the Prosecutor’s Office of the Republic of Lithuania in accordance with the provisions of the Law without delay but no later than within two business days from the date of receipt of the report.

What should be the aim of reporting of breaches under this procedure?

The aim of this procedure is to encourage the public to contribute to effective financial market supervision by helping Lietuvos bankas to identify breaches of legal acts regulating the activities of financial market participants subject to supervision. The procedure is not applied in cases when the aim of reporting of a breach is to settle a dispute or otherwise protect the interests of the reporting person or another person.

What will happen if a report submitted under this procedure does not comply with the requirements for reporting potential or intended breaches of legal acts regulating the financial market by supervised financial market participants and other individuals?

If such reporting is not anonymous, the reporting person will, within five business days of the receipt of the report, be informed to the effect that the report under this procedure cannot be processed. Upon receipt of a written consent from the reporting person, the report will be processed based on the following legal acts:

  • Rules for the Examination of Requests and Complaints of Individuals and the Provision of Services to Them at the Bank of Lithuania approved by Resolution No 03-76 of the Board of Lietuvos bankas of 8 May 2014 on the approval of the rules for the examination of requests and complaints of individuals and the provision of services to them at the Bank of Lithuania;
  • Rules for the Out-of-Court Settlement of the Disputes between Consumers and Financial Market Participants in the Bank of Lithuania approved by Resolution No 03-23 of the Board of Lietuvos bankas of 26 January 2012 on the approval of the rules for the out-of-court settlement of the disputes between consumers and financial market participants in the Bank of Lithuania in the context of disputes arising between consumers and financial market participants or disputes that fall within the remit of Lietuvos bankas by virtue of other laws of the Republic of Lithuania.

Where reporting is anonymous or no above-mentioned consent is received within the time limit laid down by Lietuvos bankas, the report will not be processed and a written report in paper form will be returned to the reporting person (a copy will be retained by Lietuvos bankas).

Is it necessary to contact the employer before reporting to the Bank of Lithuania about a financial market participant under its supervision that is the reporting person's employer?

It is advisable to inquire about and, if possible, make use of the reporting mechanisms for violations implemented at your workplace. However, if such mechanisms do not exist or you believe that reporting would not be appropriate due to confidentiality or other reasons, please inform Lietuvos bankas using the methods specified below.

When reporting a violation committed by your employer to Lietuvos bankas, it is not advisable to use communication tools available at your workplace (provided by the employer) for confidentiality reasons.

Reporting of suspicious trading in securities

Lietuvos bankas invites market participants and other persons to help ensure market transparency and fair trading by reporting suspicious transactions, i.e. possible market manipulation or inside trading.

Market manipulation actions, their characteristics and examples of practices are provided for in:

The characteristics of inside information and inside trading are provided for in:

It is very important to provide Lietuvos bankas with the most accurate and detailed information describing the potential market manipulation and inside trading actions, such as the circumstances under which the transaction was concluded or the order was executed (name of the financial instrument, date, time, price, quantity, persons involved, etc.), reasons for your suspicion of market manipulation or inside trading and any other information that may be relevant.

Ways to report breaches to Lietuvos bankas

Breaches can be reported to Lietuvos bankas in the following ways:

  • electronically in writing, by completing the online form (below)
  • in paper form in writing, by sending it to the following address: Totorių g. 4, LT-01121, Vilnius; a sealed envelope must be marked “Report of a breach”
  • orally via a talk-recording telephone line, by phone +370 8 268 0888
  • orally by meeting with a designated employee at the premises of Lietuvos bankas, by phone (+370 8 268 0888) after agreeing the meeting time in advance

Breaches can also be reported anonymously. It would, however, be more beneficial if at least contact information for communication is specified (which would allow to clarify the information provided or receive necessary additional information). Persons who have reported anonymously may disclose their identity to Lietuvos bankas at any later stage. From the moment of disclosure of the identity, the person may continue communication with the designated employee, i.e. give consent to forward the report to another competent authority if Lietuvos bankas has no jurisdiction to process it, receive an acknowledgement of receipt of the report, provide additional information and receive information on the actions taken by Lietuvos bankas following the processing of the report. From the moment of disclosure, personal data are also protected as required by law: only the designated employees have access to personal data which may be disclosed to other persons only in accordance with the procedure laid down by law, etc.

Where additional clarification or information is needed to process a report of the breach, the reporting person may be asked to clarify the information provided or provide additional information. Such a request is submitted via the designated employee in a way in which the breach was reported or in another way specified by the reporting person. No request to clarify the information provided will be made if there is reason to believe that this would compromise the protection of the identity data of the reporting person.

Within 20 business days of the receipt of the report, Lietuvos bankas informs the reporting person through the designated employee of the actions taken or to be taken in the context of the reported breach, insofar as it is not prohibited by legal acts governing the protection of secrets.

Lietuvos bankas, designated employees and other employees of Lietuvos bankas must keep the identity data of reporting persons and reported persons confidential. These data are the name and surname, address, telephone number, email address of a natural person; name, code, registered address of a legal person and other data related to the natural or legal person which can be used in order to identify, directly or indirectly, the reporting person or reported person. This obligation for the employees of Lietuvos bankas continues even upon leaving service at Lietuvos bankas.

At Lietuvos bankas, the identity data of reporting persons are processed by designated employees.

If the reporting person has not expressly agreed to disclose their identity data at the time of reporting, the designated employees must ensure that the identity data of the reporting person are not disclosed when the report of breach is forwarded to the units or employees of Lietuvos bankas or other financial market supervisory authorities for processing. The employees of Lietuvos bankas may only get access to the identity data of reporting persons if such data are necessary for the discharge of their responsibilities and the Director of the Legal and Licensing Department of Lietuvos bankas authorises it in writing.

The identity data of the reporting person may only be disclosed to a court, law enforcement authorities or other persons in the following cases:

  • if the report is forwarded to the Prosecutor’s Office of the Republic of Lithuania in accordance with the Law on the Protection of Whistleblowers;
  • if the identity data of the reporting person need to be disclosed in the context of an investigation carried out by Lietuvos bankas or another financial market supervisory authority, for imposition of sanctions or for other reasons and provided that the reporting person agrees to the disclosure of their identity data;
  • on the grounds laid down in the Criminal Code of the Republic of Lithuania if the identity data of the reporting person are necessary for the pre-trial investigation initiated following the report or for conducting criminal proceedings;
  • if Lietuvos bankas receives a legally binding request from a court or other public authority to disclose the identity data of the reporting person;
  • it is found that the reporting person has intentionally submitted incorrect or misleading information.

According to the Law on the Protection of Whistleblowers, a whistleblower is not subject to any contractual or tort liability as well as liability for insult to honour and dignity, for defamation or slander if the whistleblower reasonably believed to be providing correct information when reporting a breach under the procedure laid down in the Law. However, the provision of knowingly false information as well as information that constitutes a state, official or professional secret does not entitle a person to any guarantees under this Law. A person who provided knowingly false information or disclosed a state, official or professional secret is liable according to the procedure laid down by law.

The Law on the Protection of Whistleblowers also provides for other measures to protect, encourage and support persons who have reported breaches (Articles 8 to 15 of the Law). The Law provides, inter alia, that no measures with an adverse effect may be taken against a person who has reported a breach for reporting the breach from the date of reporting, such as dismissal, demotion or change of location of work, intimidation, harassment, discrimination, threat of abuse, restriction of career opportunities, reduction in wages, change in working hours, doubts as to the person’s competence, communication of negative information about the person to third parties, withdrawal of the right to work with information comprising a state secret or an official secret, as well as application of any other measures adversely affecting them.

The Law also provides for the right of the whistleblower to receive remuneration for valuable information, right to receive compensation to offset the adverse effects or possible consequences suffered by the whistleblower as a result of their reporting, guarantee of free legal aid and exemption from liability for participation in the breaches reported.

Lietuvos bankas is ready to provide the reporting person with the necessary assistance in dealing with the Prosecutor’s Office of the Republic of Lithuania or other institutions, including, where necessary in the context of a labour dispute, the issue of a document confirming that the breach has been reported to Lietuvos bankas.

The procedure for reporting, receiving, processing and storing information on breaches of legal acts regulating the financial market as well as the principles of protection of personal data and other interests of reporting persons and reported persons are laid down in the Description of the Procedure for Submitting and Processing Reports of Breaches of Legal Acts Regulating the Financial Market at Lietuvos bankas.

Which reports of breaches are handled by the European Central Bank under a similar procedure?

Reports of potential breaches of EU law by entities supervised by the European Central Bank (ECB) in the context of the tasks delegated to the ECB by the Single Supervisory Mechanism Regulation are handled by the ECB.

Submit your report to the ECB here.

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