SEBI's Whistleblower Framework, introduced in 2014 and strengthened in 2018, protects informants reporting securities market violations. The mechanism offers confidentiality, financial rewards up to Rs 1 crore, and prohibition against retaliation. Administered by SEBI's Office of Investor Assistance and Education (OIAE), it complements broader investor protection measures including Investor Protection and Education Fund (IPEF), settlement proceedings, and grievance redressal mechanisms. Recent amendments enhanced reward structure and expanded coverage to include all securities market participants and intermediaries.

SEBI's whistleblower mechanism addresses information asymmetry in securities markets where regulatory detection of violations is challenging. The framework incentivizes market participants to report misconduct by offering anonymity and monetary rewards, creating a network of informed surveillance beyond traditional regulatory oversight. This complements SEBI's investor protection ecosystem that includes mandatory investor education, standardized grievance procedures, and compensation mechanisms. The system recognizes that retail investors often lack resources to pursue complex financial fraud cases independently. By institutionalizing whistleblowing, SEBI transforms potential insider knowledge into regulatory intelligence while protecting vulnerable informants from corporate retaliation. The framework's effectiveness depends on balancing adequate incentives against frivolous complaints, maintaining confidentiality protocols, and ensuring swift investigation processes. Integration with other protective measures like IPEF funding and settlement mechanisms creates comprehensive coverage from prevention through remediation. Recent policy evolution shows SEBI's recognition that modern market integrity requires participatory surveillance where stakeholders actively contribute to regulatory enforcement rather than remaining passive beneficiaries of protection.