Legislation and Regulation News

May 22, 2017

The U.S. Commodity Futures Trading Commission (CFTC) unanimously approved amendments to the CFTC’s Whistleblower Rules that will, among other things, strengthen the CFTC’s anti-retaliation protections for whistleblowers and enhance the process for reviewing whistleblower claims. Based on a reinterpretation of the CFTC’s anti-retaliation authority under the Commodity Exchange Act (CEA), the CFTC or the whistleblower may now bring an action against an employer for retaliation against a whistleblower. The amendments also prohibit employers from taking steps to impede a would-be whistleblower from communicating directly with CFTC staff about a possible violation of the CEA by using a confidentiality, pre-dispute arbitration or similar agreement. “The Whistleblower Program is an integral part of the Division’s efforts to identify and prosecute unlawful conduct. The Commission’s approval of these rules today will further strengthen and enhance our efforts to protect customers and promote market integrity,” said James McDonald, the Director of the Division of Enforcement. Part 165 of CFTC’s Regulations provides the basic framework of the agency’s Whistleblower Program. In addition to strengthening anti-retaliation protections, the new amendments will add efficiency and transparency to the process of deciding whistleblower award claims and will, in many respects, harmonize the CFTC’s rules with those of the U.S. Securities and Exchange Commission’s whistleblower program. The amended rules establish a claims review process which will utilize a Claims Review Staff, in place of the Whistleblower Award Determination Panel, to consider and issue a Preliminary Determination as to whether an award claim should be granted or denied. A whistleblower will then have an opportunity to request to view the record and may contest the Preliminary Determination before the CFTC issues a Final Determination. The amendments also make changes to other key areas, such as whistleblower eligibility requirements, and make clear that, with limited exceptions, a whistleblower may receive an award in a Covered Action, a Related Action, or both. In addition, the amendments authorize the Whistleblower Office to handle facially ineligible award claims that do not relate to a Notice of Covered Action, a final judgment in a Related Action, or a previously filed Form TCR (Tip, Complaint or Referral). The amended rules will go into effect 60 days after publication in the Federal Register. CFTC