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2017-10801

  • Federal Register, Volume 82 Issue 102 (Tuesday, May 30, 2017)

    [Federal Register Volume 82, Number 102 (Tuesday, May 30, 2017)]

    [Rules and Regulations]

    [Pages 24487-24521]

    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

    [FR Doc No: 2017-10801]

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    COMMODITY FUTURES TRADING COMMISSION

    17 CFR Part 165

    RIN 3038-AE50

    Whistleblower Awards Process

    AGENCY: Commodity Futures Trading Commission.

    ACTION: Final rule.

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    SUMMARY: The Commodity Futures Trading Commission (``Commission'') is

    amending its regulations and forms to enhance the process for reviewing

    whistleblower claims and to make related changes to clarify staff

    authority to administer the whistleblower program. The Commission also

    is making appropriate rule amendments to implement its reinterpretation

    of the Commission's anti-retaliation authority.

    DATES: This final rule is effective July 31, 2017.

    FOR FURTHER INFORMATION CONTACT: Anthony Hays, Counsel, (202) 418-5584,

    ahays@cftc.gov, Commodity Futures Trading Commission, Three Lafayette

    Centre, 1155 21st Street NW., Washington, DC 20581.

    SUPPLEMENTARY INFORMATION: The Commission is amending its rules in

    Sec. Sec. 165.1 through 165.19 and appendix A, and adopting new rule

    Sec. 165.20 and appendix B as well as amending Forms TCR (``Tip,

    Complaint or Referral'') and WB-APP (``Application for Award for

    Original Information Provided Pursuant to Section 23 of the Commodity

    Exchange Act'').

    I. Background

    In 2011, the Commission adopted its part 165 regulations, which

    implement Section 23 of the Commodity Exchange Act (``CEA''), 7 U.S.C.

    26, by establishing a regulatory framework for the whistleblower

    program.\1\ Part 165 provides for the payment of awards, subject to

    certain limitations and conditions, to whistleblowers who voluntarily

    provide the Commission with original information about a violation of

    the CEA that leads to the successful enforcement of an action brought

    by the Commission that results in monetary sanctions exceeding

    $1,000,000 (``Covered Action''), or the successful enforcement of a

    Related Action, as that term is defined in the rules.

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    \1\ See Whistleblower Incentives and Protection, 76 FR 53172

    (Aug. 25, 2011).

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    The award amount must be between 10 and 30 percent of the amount of

    monetary sanctions collected in a Covered Action or a Related Action

    and is paid from the CFTC Customer Protection Fund. The Commission has

    discretion regarding the amount of an award based on the significance

    of the information, the degree of assistance provided by the

    whistleblower, and other criteria.

    Since the whistleblower program was established in 2011, the need

    for certain improvements has become apparent. In order to address that

    need the Commission proposed amendments to the part 165 rules

    (``Proposal'').\2\ As explained further below, these rules provide for

    targeted revisions to the claims review process and to the authority of

    staff to administer the

    [[Page 24488]]

    whistleblower program. The Commission also proposed to amend the rules

    to implement its anti-retaliation authority under Section 23(h)(1)

    based on a reinterpretation of that authority. Finally, the Commission

    proposed to amend its rules to permit whistleblowers to receive awards

    based on both Covered Actions and the successful enforcement of Related

    Actions, as defined in the rules.

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    \2\ Whistleblower Awards Process, 81 FR 59551 (Aug. 30, 2016).

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    The Commission received seven comment letters in response to the

    Proposal. Most of the comment letters focused on specific aspects of

    the proposed rule amendments and made targeted recommendations and

    suggestions. Three of the comment letters were from private

    individuals, two were from law firms with whistleblower practices, and

    two were from whistleblower advocacy groups.\3\ Most of the comments

    received were generally supportive of the Commission's whistleblower

    program and proposed changes to the rules. One comment letter was

    critical of the current process for handling whistleblower award claims

    but did not provide specific comments on the proposed rules.\4\ One of

    the whistleblower advocacy groups incorporated by reference the comment

    letter previously submitted by the other group.\5\

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    \3\ See, respectively, the following: Letter dated September 12,

    2016, from Joseph N. Perlman; Letter dated September 16, 2016, from

    Chris Barnard; Letter dated September 27, 2016, from Matthew Erpen;

    Letter dated September 29, 2016, from Robert D.M. Garson, Garson,

    Segal, Steinmetz, Fladgate LLP (GS2Law); Letter dated September 29,

    2016, from Eric L. Young, Esq., and James J. McEldrew, Esq.,

    McEldrew Young (MY); Letter dated September 28, 2016, from Jacklyn

    N. DeMar, Acting Director of Legal Education, Taxpayers Against

    Fraud (TAF); and Letter dated September 29, 2016, from Stephen M.

    Kohn, Executive Director, and David K. Colapinto, General Counsel,

    National Whistleblower Center (NWC).

    \4\ See Joseph N. Perlman comment letter.

    \5\ See NWC comment letter.

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    II. Description of Final Rules

    The Commission is adopting the amendments to its part 165

    whistleblower rules as set forth in the Proposed Rules with certain

    changes made in response to public comments. The amendments and the

    public comments relevant to each amendment are discussed below.\6\

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    \6\ The public comments on the Proposed Rule are available at

    https://comments.cftc.gov/PublicComments/CommentList.aspx?id=1733.

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    Eligibility Requirements for Consideration of an Award

    a. Proposed Rule

    The Commission proposed targeted changes to the rules relating to

    consideration of an award. The Commission proposed to revise Rule 165.5

    to make clear that a claimant may receive an award in a Covered Action,

    in a Related Action, or both. Also in Rule 165.5, the Commission

    proposed to make clear that a claimant may be eligible for an award by

    providing the Commission original information without being the

    original source of the information, and the Commission provided the

    public with notice that the Commission has discretion to waive its

    procedural rules based upon a showing of extraordinary circumstances.

    In addition, the Commission proposed to revise the definition of

    ``original source'' in Rule 165.2(l) to extend the timeframe from 120

    to 180 days that a whistleblower has to file a Form TCR pursuant to

    Rule 165.3 after previously providing the same information to Congress,

    any other federal or state authority, a registered entity, a registered

    futures association, a self-regulatory organization, or to any of the

    persons described in Rule 165.2(g)(4) and (5).

    b. Comments Received

    The Commission received several comments regarding the proposed

    changes to the requirements for consideration of an award.

    Proposed Rule 165.5(b) removed being the original source of

    information received by the Commission from the eligibility criteria

    for an award. The Commission received one comment which endorsed this

    approach.\7\

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    \7\ See TAF comment letter.

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    The Commission received two comments regarding the Commission's

    proposal to amend Rule 165.5(c) to allow the Commission to waive

    procedural requirements in extraordinary circumstances. Both commenters

    supported the proposed change to this rule.\8\ One commenter noted that

    the proposed change to this rule is consistent with the overall policy

    goals of the whistleblower program and that whistleblowers have varying

    levels of sophistication and familiarity with the procedural

    requirements.\9\ Another commenter noted that rigid application of the

    procedural requirements would undermine the spirit of Congress when it

    created the whistleblower program and that the proposed change would

    further encourage whistleblowers to provide information even when they

    may not have followed all of the technical rules to be eligible for an

    award.\10\

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    \8\ See TAF and MY comment letters.

    \9\ See TAF comment letter.

    \10\ See MY comment letter.

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    Proposed Rule 165.2(l) extended the deadline from 120 to 180 days

    that a whistleblower has to make a submission to the Commission and

    retain status as the original source of information after first

    submitting the information to Congress, any other federal or state

    authority, a registered entity, a registered futures association, a

    self-regulatory organization, or to any of the persons described in

    paragraphs (g)(4) and (5) of Rule 165.2 to be eligible for an award.

    The Commission received two comments supporting this proposed

    change.\11\ One commenter stated that many whistleblowers are often at

    or beyond the 120-day period before considering external reporting

    because they wait for the outcome of the internal investigation before

    reporting externally and internal investigations often take some time.

    This commenter also stated that while 180 days is a substantial

    improvement, an even longer time frame would help ensure that well-

    intentioned individuals receive full credit for their information.\12\

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    \11\ See TAF and MY comment letters.

    \12\ See MY comment letter.

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    The other commenter agreed that the period of eligibility should be

    lengthened to 180 days but urged the Commission to state that the 180-

    day period refers only to the whistleblower's ``look back'' eligibility

    to retain original source status and that whistleblowers will not lose

    that status or eligibility for an award if they perfect their

    submission to the Commission after 180 days elapse. This commenter also

    urged the Commission to revise Rule 165.2(l)(2) to include individuals

    who first provide information to foreign governments or self-regulatory

    authorities because of the global nature of the commodities markets and

    the increasing number of international whistleblowers participating in

    the Dodd-Frank whistleblower programs. This commenter went on to state

    that there is no persuasive policy reason for excluding such persons

    from original source status because some of the Commission's recent

    enforcement cases were brought with the cooperation of foreign

    authorities and the proposed rules allow for whistleblower awards based

    on Related Actions by certain foreign authorities. Hence, this

    commenter argued that if whistleblowers may receive awards based on

    Related Actions undertaken by foreign authorities, those whistleblowers

    should be entitled to original source eligibility in instances where

    they report to a foreign authority prior to reporting to the

    Commission.\13\

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    \13\ See TAF comment letter.

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    [[Page 24489]]

    c. Final Rule

    The Commission received no comments regarding the proposed revision

    in Rule 165.5(a)(3) that makes clear that a claimant may receive an

    award in a Covered Action, in a Related Action, or both and,

    accordingly, is adopting the amendment as proposed.

    With respect to the proposed revision to Rule 165.5(b), the

    Commission believes that removing the requirement that the

    whistleblower be the original source of information received by the

    Commission is consistent with Section 23(b)(1), and will prevent the

    potential situation where a claimant reports internally before

    providing information to the Commission and the employer self-reports

    the violation of the CEA, thereby foreclosing the claimant's

    eligibility for an award because the employer is the ``original

    source'' of the information. The Commission is adopting this amendment

    as proposed.

    The Commission has also decided to adopt as proposed Rule 165.5(c),

    which clarifies that the Commission may waive any procedural

    requirements upon a showing of extraordinary circumstances.

    After consideration of the comments on Rule 165.2(l), the

    Commission has decided to adopt the rule with one change, a conforming

    change and a minor correction. The Commission is adding foreign futures

    authorities \14\ to the authorities and entities to which a claimant

    may provide information prior to filing a Form TCR and retain original

    source status. This change is consistent with the list of agencies and

    authorities in Section 23(h)(2)(C) with which the Commission can share

    information received from a whistleblower if necessary or appropriate

    to accomplish the purposes of the Commodity Exchange Act and protect

    customers. The Commission understands that individuals who are located

    outside the United States might decide to approach a local authority

    prior to providing information to the Commission. As a result, and in

    consideration of the global nature of the futures and swaps markets and

    the number of the Commission's recent enforcement actions that have

    been undertaken with the cooperation of foreign governments, the

    Commission believes it is appropriate to expand the list of entities in

    Rules 165.2(l)(1)(i) and 165.2(l)(2). In addition, the Commission is

    adding registered entity and registered futures association to, and

    removing futures association from the list of authorities in Rule

    165.2(i)(2); and adding registered entity and registered futures

    association to Rule 165.2(l)(1)(i) in order to conform those rules to

    existing language in Rules 165.4(a)(2) and 165.11 and to Section

    23(h)(2)(C)(i). The Commission is correcting a typographical error in

    Rule 165.2(l)(2) by removing ``of any'' and correcting an omission by

    inserting ``local'' in the list of authorities in the first sentence.

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    \14\ Section 1a(26) of the CEA defines foreign futures authority

    as any foreign government, or any department, agency, governmental

    body, or regulatory organization empowered by a foreign government

    to administer or enforce a law, rule, or regulation as it relates to

    a futures or options matter, or any department or agency of a

    political subdivision of a foreign government empowered to

    administer or enforce a law, rule, or regulation as it relates to a

    futures or options matter.

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    The Commission also clarifies that the 180-day timeframe in Rule

    165.2(l)(2) relates only to the date on which the Commission will

    consider a whistleblower's original information to have been received.

    Filing a Form TCR more than 180 days after reporting information to

    another authority does not strip a whistleblower of original source

    status or render a whistleblower ineligible for an award. Also, the

    Commission is amending Rule 165.2(i)(3) to extend the time from 120 to

    180 days in order to conform that rule to the extension of the

    timeframe in Rule 165.2(1)(2).

    Award Claims Review Under Rule 165.7

    a. Proposed Rules

    The Commission proposed several changes to the award claims review

    process under Rule 165.7 to better define and specify each step in the

    process. Those steps were spelled out in proposed new paragraphs (f)

    through (l), along with new provisions regarding withdrawing award

    applications in proposed paragraph (d) and disposition of claims that

    do not relate to Notices of Covered Actions (``NCAs'') or final

    judgments in Related Actions in proposed new paragraph (e). The

    proposed amendments would establish a review process similar to that

    established under the SEC's whistleblower rules.\15\ Specifically, the

    Commission proposed to discontinue the Whistleblower Award

    Determination Panel and replace it with a review process handled by a

    Claims Review Staff designated by the Director of the Division of

    Enforcement in consultation with the Executive Director, with the

    Claims Review Staff being assisted by the Whistleblower Office staff

    within the Division of Enforcement. The proposed rules also would

    provide an additional means for the submission of the required Form WB-

    APP, Application for Award for Original Information Provided Pursuant

    to Section 23 of the Commodity Exchange Act, in Rule 165.7(b)(1);

    explain the deadline for filing Form WB-APP under different timing

    scenarios for final judgments in covered judicial or administrative

    actions and Related Actions in proposed Rule 165.7(b)(3); and make a

    conforming change by renumbering prior paragraph (e) in Rule 165.7 as

    paragraph (l).

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    \15\ See 17 CFR 240.21F-10(d)-(h) (2014).

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    Proposed Rule 165.7(d) would permit a claimant to withdraw an award

    application at any point in the review process by submitting a written

    request to the Whistleblower Office.

    Proposed Rule 165.7(e) addressed the Commission's experience of

    receiving a number of Form WB-APPs that appear to be unrelated to NCAs

    or final judgments in Related Actions as well as Form WB-APPs that do

    not relate to a previously filed Form TCR. In order to reduce the

    administrative burden on the Commission, the Commission proposed that

    such facially ineligible claims primarily be handled by the

    Whistleblower Office. The Whistleblower Office would notify the

    claimant of the deficiencies in the Form WB-APP and provide an

    opportunity for the claimant to correct the deficiencies or withdraw

    the claim before the finalization of the denial of the claim. If the

    claimant does not correct the deficiencies or withdraw the claim, the

    Whistleblower Office would notify the Claims Review Staff of the

    proposed denial, which would be called a Proposed Final Disposition,

    and any member of the Claims Review Staff would have the opportunity to

    request review of the proposed denial. If no member of the Claims

    Review Staff requests review, the Proposed Final Disposition would

    become the final order of the Commission. If a member of the Claims

    Review Staff requests review, the Claims Review Staff would review the

    record for the denial and either remand to the Whistleblower Office for

    further action or issue a final order of the Commission, which consists

    of the proposed denial.

    In Rule 165.7(f), the Commission proposed that the Claims Review

    Staff would evaluate all timely award applications submitted on a Form

    WB-APP in response to the NCA or a final judgment in a Related Action.

    During the review process, the Whistleblower Office may require that

    claimants provide additional information, explanation, or assistance as

    set forth in Rule 165.5(b)(3). For award claims on Related Actions, as

    proposed in Rule 165.7(f), the Whistleblower Office may request

    additional information from the claimant to demonstrate that the

    [[Page 24490]]

    claimant voluntarily provided the governmental agency, regulatory

    authority, or self-regulatory organization the same original

    information that led to the Commission's successful enforcement action

    and the successful enforcement of the Related Action. The Whistleblower

    Office may also seek assistance and confirmation from the other agency

    in making this determination.

    In Rule 165.7(g)(1), the Commission proposed that following the

    initial evaluation by the Claims Review Staff, the Claims Review Staff

    would issue a Preliminary Determination setting forth a preliminary

    assessment as to whether the claim should be granted or denied and, if

    granted, setting forth the proposed award percentage amount. The

    Whistleblower Office would send a copy of the Preliminary Determination

    to the claimant. The proposed amendments would allow a claimant the

    opportunity to contest the Preliminary Determination.

    In Rule 165.7(g)(2), the Commission proposed that the claimant

    could take any of the following steps in response to a Preliminary

    Determination:

    Within thirty (30) calendar days of the date of the

    Preliminary Determination, the claimant may request that the

    Whistleblower Office make available for the claimant's review the

    materials that formed the basis of the Claim Review Staff's Preliminary

    Determination.

    Within sixty (60) calendar days of the date of the

    Preliminary Determination, or if a request to review materials is made,

    then within sixty (60) days of the Whistleblower Office making those

    materials available for the claimant's review, a claimant may submit a

    written response setting forth the grounds for the claimant's objection

    to either the denial of an award or the proposed amount of an award.

    The claimant may also include documentation or other evidentiary

    support for the grounds advanced in any response, and request a meeting

    with the Whistleblower Office. However, such meetings would not be

    required. The Whistleblower Office may in its sole discretion decline

    the request.

    Proposed Rule 165.7(h) provides that if a claimant fails to submit

    a timely response under new Rule 165.7(g), then a Preliminary

    Determination denying an award becomes the Final Order of the

    Commission and constitutes a failure to exhaust the claimant's

    administrative remedies. Failure to exhaust administrative remedies

    would prohibit the claimant from pursuing judicial review.

    If the claimant fails to contest a Preliminary Determination

    recommending an award, the Preliminary Determination would be treated

    as a Proposed Final Determination, which would make it subject to

    Commission review under proposed Rule 165.7(j).

    Proposed Rule 165.7(i) describes the procedure in cases where a

    claimant submits a timely response under proposed Rule 165.7(g). In

    such cases, the Claims Review Staff would consider the issues raised in

    the claimant's response, along with any supporting documentation that

    the claimant provided, and prepare a Proposed Final Determination.

    In Rule 165.7(j), the Commission proposed that when there is a

    Proposed Final Determination, the Whistleblower Office would notify the

    Commission of the Proposed Final Determination. Within thirty (30) days

    of that notification, any Commissioner may request Commission review of

    the Proposed Final Determination. If no Commissioner makes such a

    request, the Proposed Final Determination would become the Commission's

    Final Order. If a Commissioner does request review, the Commission

    would review the record that the Claims Review Staff relied upon in

    reaching its determination. On the basis of its review of that record,

    the Commission would issue its Final Order, which the Office of the

    Secretariat would then serve on the claimant. In reaching their

    decisions, the Commission and Claims Review Staff would only consider

    information in the record.

    The Office of General Counsel would review both preliminary and

    proposed final determinations prior to issuance, and no such

    determination may be issued without the Office of General Counsel's

    determination of legal sufficiency.

    In Rule 165.15(a)(2), the Commission proposed that the Enforcement

    Director, in consultation with the Executive Director, would designate

    a minimum of three and a maximum of five staff from the Division of

    Enforcement or other Commission Offices or Divisions to serve on the

    Claims Review Staff, either on a case-by-case basis or for fixed

    periods. At least one person from outside the Division of Enforcement

    would be included on the Claims Review Staff at all times. The Claims

    Review Staff would be composed only of persons who have not had direct

    involvement with the underlying enforcement action. Due to the Office

    of General Counsel's role in the review process, the Commission

    believes it is appropriate to exclude staff from that Office from

    serving as Claims Review Staff.

    b. Comments Received

    The Commission received two generally supportive comments regarding

    the proposed additions and changes to the award review process.\16\ One

    commenter stated that having dedicated staff for award determinations

    would be beneficial and urged the Commission to publish NCAs for

    Related Actions that the Commission knows emanated from the information

    provided by the whistleblower.\17\ The other commenter reasoned that

    the proposed changes in the process allow whistleblowers to better

    understand the reasons for a particular award or denial and to make

    informed requests for reconsideration, and that the proposed changes

    offer greater transparency in the awards process and will likely

    obviate the need for some appeals.\18\

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    \16\ See GS2Law and TAF comment letters.

    \17\ See GS2Law comment letter.

    \18\ See TAF comment letter.

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    c. Final Rule

    After consideration of the comments received, the Commission has

    decided to adopt Rule 165.7 as proposed. The Commission anticipates

    that these revisions will provide the public and claimants with greater

    transparency in the awards claim review process and enhance the

    expeditious and fair administration of the program. The Commission

    declines a commenter's request that the Commission publish NCAs for

    Related Actions. The Commission believes that doing so would be

    unworkable and burdensome for the Commission. Publishing NCAs on all

    criminal and civil actions that may become Related Actions would

    require staff to track, monitor, and report on many actions that are

    not Commission actions. Rule 165.7(b)(3) clearly describes how and when

    actions brought by other agencies become Related Actions and when a

    claimant must file a Form WB-APP with the Commission to apply for an

    award in connection with these actions. It is the claimant's

    responsibility to track the outcome of a Related Action if the claimant

    has an interest in pursuing an award application based on that Related

    Action.

    In response to the comment on the nature of the Claims Review

    staff, the Commission notes that the Claims Review Staff will be drawn

    from the Commission's Divisions and Offices, other than the Office of

    General Counsel. As detailed in Rule 165.7, the role of Claims Review

    Staff is primarily

    [[Page 24491]]

    to make preliminary decisions on the merits of award applications

    including, if applicable, award amounts.\19\ Service by a Commission

    employee on the Claims Review Staff will be in addition to the other

    duties of the employee in their Division or Office. As is the case at

    the SEC, the Claims Review Staff will be assisted by staff from the

    Whistleblower Office who will assemble the factual record related to an

    award claim, provide analysis of an award claimant's eligibility and,

    if applicable, make a recommendation of a proposed award amount.

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    \19\ The Commission will have an opportunity to review

    preliminary denial decisions that are contested by the claimant and

    all award recommendations. See Rule 165.7(j).

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    Awards for Related Actions

    a. Proposed Rules

    For award claims on Related Actions, the Commission proposed to

    amend Rule 165.11 to permit claimants who are eligible to receive an

    award in a covered judicial or administrative action to also receive an

    award based on the monetary sanctions that are collected from a final

    judgment in a Related Action. The exception would be that the

    Commission would not make an award to a claimant for a Related Action

    if the claimant has been granted an award by the SEC for the same

    action under the SEC's whistleblower program. This would prevent a

    claimant from ``double dipping'' and receiving more than one award for

    the same action. Similarly, if the SEC has previously denied an award

    to a claimant in a Related Action, the claimant would be precluded from

    relitigating any issues before the Commission that the SEC resolved

    against the claimant as part of the SEC's award denial. The limitations

    on obtaining an award for both Covered Actions and final judgments in

    Related Actions are similar to those imposed by the SEC in its

    whistleblower program.

    A Related Action under Rule 165.2(m) is based on the original

    information voluntarily submitted by a whistleblower to the Commission

    that led to the successful enforcement of a Commission action, and

    therefore, an action may only become a Related Action after there is a

    successful Commission action. The Commission accordingly proposed

    revisions to clarify timing requirements for filing whistleblower award

    claims regarding Related Actions. The proposed revisions were intended

    to clarify that, except in the circumstances described in proposed Rule

    165.7(b)(3)(ii), award claims for a Related Action shall be filed

    within 90 days after an action meets the definition of Related Action

    if the order in the Related Action was issued prior to the successful

    enforcement of a Commission action. The proposed revisions also clarify

    that award claims for a Related Action and in response to a Notice of

    Covered Action may be submitted on the same Form WB-APP in certain

    circumstances.

    b. Comments Received

    The Commission received one comment regarding Proposed Rule 165.11.

    The commenter expressed some confusion as to whether the information

    provided by a whistleblower must be presented to the Commission prior

    to presenting the information to another authority in order for a

    whistleblower to be eligible for an award in a Related Action.\20\ The

    commenter stated that the Commission should clarify that whistleblowers

    who first take their information to another authority and later provide

    their information to the Commission are eligible for an award.

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    \20\ See TAF comment letter.

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    c. Final Rule

    The Commission has decided to adopt Rule 165.11 as proposed. The

    Commission also takes this opportunity to clarify that a whistleblower

    retains eligibility under Rule 165.11, Rule 165.5, and Rule 165.2(l)

    for an award based on information provided by the whistleblower to

    another authority prior to the time that the whistleblower provided the

    information to the Commission.

    Contents of Record for Award Determinations

    a. Proposed Rules

    The Commission proposed to amend Rule 165.10(a) to identify

    additional items that may be included in the contents of record for

    award claims as a result of the Commission's proposal to amend Rule

    165.11 to permit claimants who are eligible to receive an award in a

    covered judicial or administrative action to also receive an award

    based on the monetary sanctions that are collected from a final

    judgment in a Related Action. For Related Actions, any documents or

    materials, including sworn declarations from third parties, that are

    received or obtained by the Whistleblower Office to assist the

    Commission in resolving the claimant's award application, including

    information relating to the claimant's eligibility, may be included in

    the record. In addition, any information provided to the Commission by

    the entity bringing the Related Action that has been authorized by the

    entity for sharing with the claimant may be part of the record. Neither

    of these types of information may be relied upon by the Commission or

    the Claims Review Staff in making a decision on a whistleblower award

    claim or included in the contents of the record if the entity did not

    authorize the Commission to share the information with the claimant.

    The Commission also proposed revisions to Rules 165.10(b) and

    165.13(b) to clarify that the record on appeal shall not include any

    pre-decisional or internal deliberative process materials that are

    prepared to assist the Commission or Claims Review Staff in deciding a

    claim.

    b. Comments Received

    The Commission received one comment regarding the record for award

    determinations and appeals. This commenter strongly urged the

    Commission to further revise Proposed Rules 165.10 and 165.13 to not

    categorically exclude from the record pre-decisional and internal

    deliberative process materials prepared to assist the Commission in

    award determinations, and suggested that the Commission would be

    denying whistleblowers a meaningful right to appeal by defining by rule

    what constitutes the record.\21\

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    \21\ See TAF comment letter.

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    c. Final Rule

    Following consideration of the comments received, the Commission

    has decided to adopt the revisions to Rules 165.10(a) and (b) and

    165.13(b) as proposed. The Commission disagrees with the comment that

    the Commission defining by rule what constitutes the record denies a

    claimant a meaningful right to appeal award determinations.\22\ Under

    Rules 165.10 and 165.13, all factual materials relied on by Claims

    Review Staff or the Commission in making an award determination will be

    available to the claimant and reviewing court. The Commission believes

    that pre-decisional or internal deliberative process materials that are

    prepared to assist the Commission or Claims Review Staff from the

    record are protected by attorney-client privilege as well as attorney

    work product under well

    [[Page 24492]]

    settled law. Similarly, the exclusion of any documents or materials

    provided by a third-party that have not been authorized for release by

    the third-party does not deny the claimant due process because these

    materials will not be considered by the Commission or Claims Review

    Staff in reaching a decision on the award claim.

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    \22\ As an example, the commenter referred to appeals of IRS

    whistleblower cases (Insinga v. Commissioner, Tax Court Docket No.

    9011-13W (July 27, 2016) and Whistleblower One 10683-13W et al. v.

    Commissioner, 145 T.C. No. 8 (September 16, 2015)) in which the

    whistleblower sought factual information in the underlying

    enforcement cases to determine whether the information the

    whistleblower provided the IRS contributed to the success of the

    enforcement action. The Commission believes its practice is

    distinguishable in that all of the facts that underlie the

    Commission's decision are included in the record under Rules 165.10

    and 165.13.

    ---------------------------------------------------------------------------

    Authority To Administer the Program

    a. Proposed Rule

    The Commission proposed to directly assign responsibilities for

    administering the program by rule rather than by delegation in Rule

    165.15 in light of the proposed changes to the claims review process.

    Since 2013, the Whistleblower Office has been located within the

    Division of Enforcement. The Commission believes that it is appropriate

    to assign overall responsibility for administering the whistleblower

    program to the Director of the Division of Enforcement. The Commission

    notes that this approach is consistent with the SEC's practice.

    The Commission also proposed to directly assign responsibility to

    Claims Review Staff for the issuance of Preliminary Determinations and

    Proposed Final Determinations, and issuance of Proposed Final

    Dispositions to the WBO. In this connection, the Commission proposed,

    again consistent with the SEC's practice, that no member of the Claims

    Review Staff can have had any direct involvement in the underlying

    enforcement case.

    b. Comments Received

    The Commission received no comments regarding the proposed changes

    to the authority to administer the whistleblower program.

    c. Final Rule

    The Commission has decided to adopt the revisions to the authority

    to administer the program as proposed.

    Whistleblower Identifying Information

    a. Proposed Rule

    Rule 165.4 implements the confidentiality protections for

    whistleblower identifying information contained in Section 23(h)(2). In

    proposed Rule 165.15(a)(3), the Commission proposed to authorize the

    Director of the Division of Enforcement to act on its behalf to

    disclose whistleblower identifying information as permitted by Section

    23(h)(2)(C) and Rule 165.4(a)(2) and (3). The Commission stated in the

    Proposal that it expects the Director of Enforcement to exercise this

    discretion to release such sensitive information in a manner consistent

    with, and when deemed necessary or appropriate to accomplish, the

    customer protection and law enforcement goals of the whistleblower

    program. The Commission said in the Proposal that it believes that this

    delegation of authority will increase investor protection by

    facilitating administration of the whistleblower program as well as

    investigations and actions by those agencies and authorities that are

    eligible to receive whistleblower identifying information under Section

    23(h)(2)(C) and Rule 165.4. Any agency or authority that receives

    whistleblower identifying information is bound by the same

    confidentiality requirements as those applicable to the Commission

    under Section 23(h)(2)(A) and such sharing of information does not

    change the confidential nature of the information. Certain information

    provided to other agencies or authorities is also protected from

    disclosure under Section 8 of the CEA. The Commission also proposed to

    revise a question in the Form TCR, question E.8, seeking consent from

    whistleblowers to share their information with other authorities.

    b. Comments Received

    The Commission received one comment opposing the proposed changes

    to Rule 165.4 and Form TCR. The commenter viewed the proposed changes

    as a ``loosening'' of the confidentiality of a whistleblower's

    identity. In addition, the commenter suggested that: (1) A

    whistleblower should be entitled to know the other agencies with which

    identifying information is shared; (2) the scope of the proposal on

    sharing the whistleblower's identifying information is too broad; and,

    (3) the Commission does not have the ability to monitor or enforce

    confidential treatment of the whistleblower's identifying information

    once it has been shared with other agencies. The commenter also

    suggested that the whistleblower should be consulted by the Commission

    prior to any sharing of the whistleblower's identifying information

    with other agencies and provided the opportunity to prevent such

    sharing because the whistleblower may have reported to the Commission

    rather than to another authority as the result of previous encounters

    with personnel at other agencies that left the whistleblower with less

    trust or confidence in those agencies. Finally, the commenter argued

    that the sharing of information with self-regulatory organizations is

    too broad because the term ``self-regulatory organization'' is not

    properly defined in the rules.\23\

    ---------------------------------------------------------------------------

    \23\ See GS2Law comment letter.

    ---------------------------------------------------------------------------

    c. Final Rule

    After consideration of the comment received, the Commission is

    adopting Rule 165.4(a)(2) as proposed, with a minor change. Section

    23(h)(2)(C) provides the Commission with the authority to share all

    information provided by the whistleblower with the authorities listed

    in that section without the consent or consultation of the

    whistleblower, subject to the limitation that providing the

    whistleblower's identifying information is necessary or appropriate to

    accomplish the purposes of the CEA and protect customers. Reassigning

    the authority to make the decision to disclose whistleblower

    identifying information in a manner permitted by Section 23(h)(2)(C)

    from the Director of the Whistleblower Office to a more senior

    Commission official, the Director of the Division of Enforcement, is

    not a loosening of whistleblower identity protections. The Commission

    believes that this delegation of authority will increase investor

    protection by facilitating administration of the whistleblower program

    as well as investigations and actions by those agencies and authorities

    that are eligible to receive whistleblower identifying information

    under Section 23(h)(2)(C) and Rule 165.4. Section 23(h)(2)(C)(i), Rule

    165.4(a)(2), and the Privacy Act Notice on Form TCR identify for

    whistleblowers the entities with which whistleblower identifying

    information may be shared. If a potential whistleblower is not

    comfortable with the possibility that confidential information about

    them may be shared with one or more of these entities, the potential

    whistleblower can decide not to file a Form TCR.

    The Commission does not believe that Commission monitoring of the

    treatment of confidential whistleblower information by a receiving

    authority is necessary. As the commenter pointed out, receiving

    authorities are bound by the same confidentiality provisions as the

    Commission. The Commission makes sure that a receiving authority

    understands these limitations when it shares confidential whistleblower

    information with them. Further, all of the entities with which the

    Commission may share confidential information are experienced in

    handling and protecting confidential information such as whistleblower

    identifying information.

    The Commission does not agree with the commenter's assertion that

    ``self-

    [[Page 24493]]

    regulatory organization'' is not defined. Section 23(h)(2)(C)(i)(III)

    limits the self-regulatory organizations with which confidential

    whistleblower information can be shared to those self-regulatory

    organizations that fit within the definition in section 3(a) of the

    Securities Exchange Act of 1934.\24\ This is the meaning of ``self-

    regulatory organization'' throughout Section 23 of the CEA and the part

    165 Rules. To eliminate any confusion in this regard, the Commission is

    making conforming amendments throughout the Part 165 Rules to clarify

    that a self-regulatory organization is a self-regulatory organization

    as defined by section 3(a) of the Securities Exchange Act of 1934.

    ---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78c(a).

    ---------------------------------------------------------------------------

    Finally, in light of the comments, the Commission also has

    determined to remove Question E.8 on Form TCR. The wording of this

    question was not consistent with the authority granted to the

    Commission to share whistleblower identifying information in Section

    23(h)(C)(i) and the language of Rule 165.4(a)(2). The Privacy Act

    Notice in Form TCR puts potential whistleblowers on notice that the

    information that they provide to the Commission may be shared with

    other authorities.

    Retaliation Against Whistleblowers

    a. Proposed Rule

    In the Proposal, the Commission proposed several substantial

    changes to its anti-retaliation authority. The Commission proposed

    revisions to Rule 165.19 and appendix A, and the addition of new Rule

    165.20. The Commission proposed to amend Rule 165.19 to prohibit a

    person from taking any action to impede an individual from

    communicating directly with the Commission's staff about a possible

    violation of the CEA, including by enforcing, or threatening to

    enforce, a confidentiality agreement or predispute arbitration

    agreement with respect to such communications. The Commission also

    proposed to revise its 2011 interpretation that it lacked statutory

    authority to bring an enforcement action against an employer that

    retaliated against a whistleblower. The Commission proposed that

    Sections 6(c), 6(d), 6b, 6c, and 23(i) of the CEA allow the Commission

    to pursue such violations of the Act through an enforcement action. The

    Commission proposed Rule 165.20 to make clear that Section 23(h)(1)(A)

    of the CEA, including the rules in part 165 promulgated thereunder, is

    enforceable in an action or proceeding brought by the Commission.

    Proposed Rule 165.20(c) provides that the anti-retaliation protections

    apply irrespective of whether a whistleblower qualifies for an award.

    The Commission also proposed changes to appendix A to reflect the

    Commission's ability to bring enforcement actions to prosecute

    violations of the anti-retaliation prohibition of Section 23(h)(1)(A).

    b. Comments Received

    The Commission received several comments regarding the proposed

    revisions to the anti-retaliation provisions. The Commission received

    one comment letter that addressed the proposed revisions to Rules

    165.19(b), 165.20(b) and 165.20(c) \25\ and another comment letter

    focused on proposed Rule 165.20(c).\26\

    ---------------------------------------------------------------------------

    \25\ See MY comment letter.

    \26\ See MY and TAF comment letters.

    ---------------------------------------------------------------------------

    The comment on Rule 165.19(b) supported the proposal and noted that

    this change will more closely align the Commission with the SEC with

    respect to combating the chilling of whistleblowing by employers who

    require waivers of rewards in severance packages for whistleblowing.

    This commenter was similarly supportive of the proposed expansion

    of Commission enforcement authority to address retaliation against

    whistleblowers. This commenter noted that more substantial penalties or

    a government enforcement action would be more apt to deter retaliation

    against whistleblowers than only a private right of action.

    Both commenters asked the Commission to clarify its position on

    proposed Rule 165.20(c) with regard to taking enforcement action

    against employers that retaliate against whistleblowers prior to the

    whistleblower filing a Form TCR with the Commission. One commenter

    reiterated the point that many whistleblowers await the outcome of any

    internal investigation before providing the Commission any

    information.\27\ In the commenter's view, it would not be fair or in

    the public interest to leave such a whistleblower unprotected during

    this interim period between reporting internally and filing a Form TCR

    with the Commission. This commenter further explained that the

    Commission taking enforcement action when companies or individuals

    retaliate against whistleblowing activity prior to the filing of a Form

    TCR will create additional incentives for employees to report

    internally before providing information to the Commission.

    ---------------------------------------------------------------------------

    \27\ See MY comment letter.

    ---------------------------------------------------------------------------

    c. Final Rule

    Having considered the fully supportive comment on Rules 165.19(b)

    and 165.20(b), the Commission is adopting these rules as proposed. The

    Commission is also re-organizing and making minor changes to proposed

    Appendix A to better reflect the fact that either the Commission or a

    private litigant can bring an action for a violation of Section

    23(h)(1)(A).

    By adopting proposed Rule 165.20(b), the Commission is confirming

    its decision to revise its 2011 interpretation that it lacks the

    statutory authority to bring an enforcement case against an employer

    that violates the anti-retaliation prohibition in Section 23(h)(1). The

    2011 interpretation failed to fully consider the statutory context of

    Section 23 and other CEA provisions. The 2011 interpretation does not

    comport with Section 23(h)(1)(A)'s prohibition against retaliation; the

    Commission's broad rulemaking authority under Section 23(i); and, the

    Commission's general authority to prosecute violations of any CEA

    provision (including Section 23(h)(1)(A)) as well as violations of the

    Commission's rules and orders under CEA sections 6(c), 6(d), 6b and 6c.

    Sections 6(c), 6(d), 6b and 6c of the Act empower the Commission to

    take actions for the violation of ``any'' CEA provision or rule or

    regulation thereunder. Although Section 23(h)(1)(B) provides a private

    right of action, nothing in that sub-section purports to limit the

    Commission's general enforcement authority or suggests that the private

    right of action is exclusive.

    With regard to Rule 165.20(c), the Commission has decided, after

    considering the comments received, to adopt it with some modification.

    The Commission believes these revisions will further encourage

    whistleblowers to report internally\28\ as well as deter retaliatory

    practices against whistleblowers.

    ---------------------------------------------------------------------------

    \28\ The part 165 Rules encourage whistleblowers to report

    internally prior to reporting to the Commission. Rule 165.2(l)(2),

    discussed above, allows a whistleblower to retain original source

    status after reporting internally. Additionally, Rule 165.9(b)(4)

    includes in the factors that may increase the amount of an award

    whether and the extent to which a whistleblower reported the

    possible violations through internal whistleblower, legal, or

    compliance procedures before or at the same time as reporting those

    violations to the Commission, and whether and the extent to which a

    whistleblower assisted any internal investigation or inquiry

    concerning the reported violations.

    ---------------------------------------------------------------------------

    It would be inconsistent for the Commission to encourage internal

    reporting by whistleblowers and not extend to them anti-retaliation

    [[Page 24494]]

    protections to the extent the CEA permits. To do so would place

    whistleblowers who report internally in a worse position than

    whistleblowers who do not report internally prior to reporting to the

    Commission, forcing whistleblowers to choose between reporting

    internally first in the hopes of increasing any award or foregoing

    reporting internally in order to preserve anti-retaliation protections.

    However, the anti-retaliation protections in the CEA do not extend

    to all whistleblowers who report internally. Section 23(h) and Rule

    165.20(a) provide that the whistleblower in a private action or the

    Commission in an enforcement action must be able to show that

    retaliation occurred because of any lawful act done by the

    whistleblower in providing information to the Commission in accordance

    with the part 165 rules, or assisting in any investigation or judicial

    or administrative action of the Commission based upon or related to

    such information. The ability to make this showing will depend on the

    facts and circumstances of a particular case. Actions that an employer

    took after a whistleblower reported internally but before providing

    information to the Commission may be relevant to whether retaliation

    that is prohibited under Section 23(h)(1) occurred. For this reason,

    the Commission is adding language to Rule 165.20(b) to explicitly

    recognize this possibility.

    Payment of Awards

    a. Comment Received

    The Commission proposed no revisions to Rule 165.14 on the payment

    of awards. However, the Commission received one comment regarding the

    payment of awards.\29\ This commenter noted that the current part 165

    Rules do not make available the payment of the minimum amount of an

    award (10%) until the whistleblower's time to appeal has expired, and

    suggested that the rules be amended to provide for payment of the

    minimum amount of an award at the time the order of award is issued.

    This commenter argued that once an award has been ordered by the

    Commission, the Commission has admitted that there is an entitlement to

    an award and the Commission is estopped from later removing an award

    during the appeal process. In addition, this commenter stated that

    often the elapsed time between the whistleblower's original tip and any

    award is measured in years, not weeks or months, and that waiting on

    the resolution of any appeals would only lengthen that timeframe.

    ---------------------------------------------------------------------------

    \29\ See GS2Law comment letter.

    ---------------------------------------------------------------------------

    b. Final Rule

    The Commission declines the request to amend Rule 165.14 to permit

    payment of any portion of an award prior to the completion of the

    appeals process for all whistleblower award claims arising from a NCA

    or Related Action.

    Section 23(f)(2) provides that the Commission's determination to

    whom to pay an award and the amount of any award is appealable to the

    appropriate U.S. Court of Appeals. In response to an appeal from a

    whistleblower who received no award from the Commission or who

    disagreed with the amount of a Commission award, a Court of Appeals

    could set aside the Commission's decision to make an award to another

    whistleblower under the same NCA or Related Action if that award

    decision does not meet the applicable standard of review.\30\ This

    possibility makes it prudent for the Commission to refrain from paying

    any portion of an award until the completion of the appeals process for

    all whistleblower award claims arising from an NCA or a Related Action

    as provided in Rule 165.14(b)(2). As a result, the Commission is not

    making any changes to Rule 165.14 in response to the comment.

    ---------------------------------------------------------------------------

    \30\ 7 U.S.C. 26(f)(3) states that the court shall review the

    determination made by the Commission in accordance with section 706

    of title 5.

    ---------------------------------------------------------------------------

    Office of Consumer Outreach

    a. Amendment

    The office formerly known as the Office of Consumer Outreach has

    changed its name to the Office of Customer Education and Outreach. The

    Commission is renaming the Office in Rule 165.12. Because Rule 165.12

    is a rule of the Commission's ``organization, procedure or practice''

    the Commission need not present this revision for notice and

    comment.\31\

    ---------------------------------------------------------------------------

    \31\ See 5 U.S.C. 553.

    ---------------------------------------------------------------------------

    Conforming and Technical Amendments

    a. Proposed Amendments

    To conform to the proposed changes to Rules 165.7 and 165.15, the

    Commission proposed to strike the reference to ``or its delegate'' in

    Rule 165.11 in the undesignated material before paragraph (a).

    The Commission proposed to amend Rule 165.2(i)(2) concerning the

    definition of information that led to a successful enforcement action

    because it contains an erroneous cross-reference. The reference is

    intended to be to 165.2(l) regarding the definition of original source.

    The rule currently refers to paragraph (i) of this section.

    The Commission proposed to make a minor change to the wording of

    Rule 165.3 concerning the procedures for submitting original

    information because it contains an erroneous reference to a two-step

    process. This change makes the language conform to the process

    previously adopted.\32\

    ---------------------------------------------------------------------------

    \32\ Whistleblower Incentives and Protection, 76 FR at 53183

    (Aug. 25, 2011) (explaining that the rule was adopted with a more

    streamlined process and one less form than the original proposal).

    ---------------------------------------------------------------------------

    The Commission proposed to amend Rule 165.13(b) concerning appeals

    because it contains an erroneous cross-reference. The reference

    intended is to Rule 165.10 regarding contents of the record, rather

    than Rule 165.9 regarding criteria for determining award amounts.

    The Commission proposed to move and include updated Form TCR and

    Form WB-APP in a new appendix B to part 165. The updated Form TCR and

    Form WB-APP include revisions that previously received information

    collection requirement approval by the Office of Management and

    Budget.\33\ The Commission also proposed revisions to the submission

    instructions portions of the forms to conform to the proposed revisions

    in the part 165 Rules.

    ---------------------------------------------------------------------------

    \33\ The Form TCR and Form WB-APP OMB Control Number is 3038-

    0082. Both forms last received OMB approval on April 8, 2015, with

    an expiration date of April 30, 2018.

    ---------------------------------------------------------------------------

    Finally, the Commission proposed to make a minor change in the

    wording of current Sec. 165.7(e), in addition to designating current

    paragraph (e) as new paragraph (l).

    b. Comments Received

    The Commission received no comments regarding the proposed

    conforming and technical amendments.

    c. Final Rules

    The Commission has decided to adopt the conforming and technical

    amendments as proposed.

    III. Related Matters

    A. Regulatory Flexibility Certification

    The Regulatory Flexibility Act \34\ requires that agencies consider

    whether the rules they propose will have a significant economic impact

    on a substantial number of small entities and, if so, provide a

    regulatory flexibility analysis respecting the impact.\35\ In the

    Commission's Proposing Release, the Chairman, on behalf of the

    Commission, certified that

    [[Page 24495]]

    a regulatory flexibility analysis is not required because the persons

    that would be subject to the rules--individuals--are not ``small

    entities'' for purposes of the Regulatory Flexibility Act and the rules

    therefore would not have a significant economic impact on a substantial

    number of small entities. The Commission received no comments regarding

    this conclusion.

    ---------------------------------------------------------------------------

    \34\ 5 U.S.C. 601, et seq.

    \35\ Id.

    ---------------------------------------------------------------------------

    B. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521, imposes

    certain requirements on federal agencies (including the Commission) in

    connection with their conducting or sponsoring any collection of

    information as defined by the PRA. The Commission believes that the

    amendments will not impose new recordkeeping or information collection

    requirements that require approval by the Office of Management and

    Budget under the PRA.

    C. Cost-Benefit Considerations

    CEA Section 15(a) requires the Commission to consider the costs and

    benefits of its actions before promulgating a regulation under the CEA

    or issuing certain orders.\36\ Section 15(a) further specifies that the

    costs and benefits shall be evaluated in light of the following five

    factors: (1) Protection of market participants and the public; (2)

    efficiency, competitiveness, and financial integrity of futures

    markets; (3) price discovery; (4) sound risk management practices; and

    (5) other public interest considerations. The Commission considers the

    costs and benefits resulting from its discretionary determinations with

    respect to the Section 15(a) factors. The Commission may in its

    discretion give greater weight to any one of the five enumerated areas

    and could in its discretion determine that, notwithstanding its costs,

    a particular rule is necessary or appropriate to protect the public

    interest or to effectuate any of the provisions or accomplish any of

    the purposes of the CEA.

    ---------------------------------------------------------------------------

    \36\ 7 U.S.C. 19(a).

    ---------------------------------------------------------------------------

    Since the basic framework of part 165 remains substantially

    unchanged, the Commission believes that the costs and benefits of the

    rule amendments and the status quo baseline (the current rule), to

    which the rules' costs and benefits are compared, are similar, but with

    certain additional benefits attendant to these amendments.\37\ The Rule

    165.7 amendments will add transparency to the Commission's process of

    deciding whistleblower award claims and will harmonize the Commission's

    rules with those of the SEC. The amendments clarify each step of the

    process that a whistleblower must follow when making an award claim.

    The Commission believes that such transparency and harmonization will

    increase the benefits of the part 165 Rules relative to the benefits of

    the current rules because potential whistleblowers will have greater

    clarity about the claims and awards process and greater assurance that

    retaliation will not be tolerated. The Commission believes this clarity

    and protection will encourage whistleblowers to step forward. Thus, the

    rules should enhance protection of market participants and the public

    as well as market integrity without materially adding to the costs

    attendant to the current regime.

    ---------------------------------------------------------------------------

    \37\ The Commission believes that there is not likely to be any

    material difference between the amendments and the status quo

    baseline in terms of cost.

    ---------------------------------------------------------------------------

    The Rule 165.4 and 165.15 amendments assign to the Director of the

    Division of Enforcement the authority to administer the whistleblower

    program and release whistleblower identifying information. Since these

    amendments relate solely to the Commission's allocation of authority

    among its staff, the Commission believes that these changes will impose

    no material costs on market participants or the public. At the same

    time, the Commission believes the protection of market participants and

    the public will be enhanced through a more effective and efficient

    deployment of staff resources.

    The Rule 165.19 and 165.20 amendments clarify the anti-retaliation

    protections available under the Commission's whistleblower program in

    light of the Commission's reconsideration of its authority under

    Section 23(h)(1) in conjunction with Sections 6(c), 6(d), 6b, 6c, and

    23(i) of the CEA. These changes remove any gap in enforcement authority

    between the Commission and the SEC with regard to whistleblower

    protections against retaliation. The Commission believes that these

    changes will impose no material costs on market participants or the

    public. The rules do not impose any new regulatory burden.\38\ To

    comply with the rules, market participants must refrain from engaging

    in conduct that is already subject to private rights of action, or

    including certain provisions waiving rights and remedies or requiring

    arbitration of disputes in employment agreements. The Commission

    further believes that the rules will have a positive effect on

    efficiency, competitiveness, and financial integrity of the markets

    that the Commission regulates through improving detection and

    remediation of potential violations of the CEA and Commission

    regulations. For instance, market participants may be further deterred

    from engaging in violations of the CEA and Commission rules because the

    likelihood of being caught has increased due to improvements to the

    whistleblower program that encourage more whistleblowers to provide

    information to the Commission.

    ---------------------------------------------------------------------------

    \38\ The Commission believes that the new rule provision

    regarding Commission enforcement does not significantly affect any

    reliance interests because the provision relates to conduct that is

    already prohibited by Section 23 of the CEA.

    ---------------------------------------------------------------------------

    The Commission believes that price discovery and sound risk

    management practices will not be materially affected by the amendments.

    Also, the Commission has not identified any other relevant public

    interest considerations.

    The Commission invited public comment on its cost-benefit

    considerations, including the Section 15(a) factors described above.

    Commenters were invited to submit any data or other information that

    they had that quantified or qualified the costs and benefits of the

    Proposal. None of the commenters submitted any data or other

    information that quantified or qualified the costs and benefits of the

    proposed rules, nor did they otherwise comment on the cost-benefit

    considerations as stated in the proposed rules.

    Alternatives Suggested by Commenters

    The Commission adopts several alternatives and makes certain

    clarifications as suggested by commenters to the proposal:

    After consideration of the comments on Rule 165.2(l), the

    Commission adopts the rule with one change and a correction. The

    Commission is adding foreign futures authorities to the authorities and

    entities to which a claimant may provide information prior to filing a

    Form TCR and retain original source status.

    The Commission clarifies that the 180-day timeframe in

    Rule 165.2(l)(2) relates only to the date on which the Commission will

    consider a whistleblower's original information to have been received.

    Filing a Form TCR more than 180 days after reporting information to

    another authority does not strip a whistleblower of original source

    status or render a whistleblower ineligible for an award.

    The Commission is adopting Rule 165.4(a)(2) as proposed,

    with a minor change. Section 23(h)(2)(C)(i), Rule 165.4(a)(2), and the

    Privacy Act Notice on Form TCR identify for

    [[Page 24496]]

    whistleblowers the entities with which whistleblower identifying

    information may be shared.

    Section 23(h)(2)(C)(i)(III) limits the self-regulatory

    organizations with which confidential whistleblower information can be

    shared to those self-regulatory organizations that fit within the

    definition in section 3(a) of the Securities Exchange Act of 1934.\39\

    The Commission is making conforming amendments throughout the part 165

    Rules to clarify that a self-regulatory organization is a self-

    regulatory organization as defined by section 3(a) of the Securities

    Exchange Act of 1934.

    ---------------------------------------------------------------------------

    \39\ Infra, footnote 24.

    ---------------------------------------------------------------------------

    The Commission has determined to remove Question E.8 on

    Form TCR. The wording of this question was not consistent with the

    authority granted to the Commission to share whistleblower identifying

    information in Section 23(h)(C)(i) and the language of Rule

    165.4(a)(2). The Privacy Act Notice in Form TCR puts potential

    whistleblowers on notice that the information that they provide to the

    Commission may be shared with other authorities.

    The Commission has decided to adopt Rule 165.20(c) with

    some modification. The anti-retaliation protections in the CEA do not

    extend to all whistleblowers who report internally. Actions that an

    employer took after a whistleblower reported internally but before

    providing information to the Commission may be relevant to whether

    retaliation that is prohibited under Section 23(h)(1) occurred. For

    this reason, the Commission is adding language to Rule 165.20(b) to

    explicitly recognize this possibility.

    The Commission also received alternatives to the final rule from

    commenters that it chooses not to adopt:

    The Commission does not elect to extend the deadline

    beyond 180 days under 165.2(l) to retain status as the original source

    of information after first submitting the information to Congress, any

    federal or state authority, a registered entity, a registered futures

    association, a self-regulatory organization, or to any persons

    described in paragraphs (g)(4) and (5) of Rule 165.2 to be eligible for

    an award. The Commission believes that 180 days provides ample time for

    a whistleblower to provide information to the Commission after

    submitting the information to any of the aforementioned entities or

    authorities.

    The Commission declines a commenter's request that the

    Commission publish NCAs for Related Actions. The Commission believes

    that doing so would be unworkable and burdensome for the Commission.

    Publishing NCAs on all criminal and civil actions that may become

    related actions would require staff to track, monitor, and report on

    many actions that are not Commission actions.

    The Commission has chosen not to further revise Proposed

    Rules 165.10 and 165.13 to not categorically exclude from the record

    pre-decisional and internal deliberative process materials prepared to

    assist the Commission in award determinations. Under Rules 165.10 and

    165.13, all factual materials relied on by Claims Review Staff or the

    Commission in making an award determination will be available to the

    claimant and reviewing court. The Commission believes that pre-

    decisional or internal deliberative process materials that are prepared

    to assist the Commission or Claims Review Staff are protected by

    attorney-client privilege as well as attorney work product under well

    settled law. Similarly, the exclusion of any documents or materials

    provided by a third-party that have not been authorized for release by

    the third-party does not deny the claimant due process because these

    materials will not be considered by the Commission or Claims Review

    Staff in reaching a decision on the award claim.

    The Commission declines the request to amend Rule 165.14

    to permit payment of any portion of an award prior to the completion of

    the appeals process for all whistleblower award claims arising from a

    NCA or related action. Section 23(f)(2) provides that the Commission's

    determination to whom to pay an award and the amount of any award is

    appealable to the appropriate U.S. Court of Appeals. In response to an

    appeal from a whistleblower who received no award from the Commission

    or who disagreed with the amount of a Commission award, a Court of

    Appeals could set aside the Commission's decision to make an award to

    another whistleblower under the same NCA or Related Action if that

    award decision does not meet the applicable standard of review.\40\

    This possibility makes it prudent for the Commission to refrain from

    paying any portion of an award until the completion of the appeals

    process for all whistleblower award claims arising from an NCA or a

    related action as provided in Rule 165.14(b)(2).

    ---------------------------------------------------------------------------

    \40\ Infra, footnote 30.

    ---------------------------------------------------------------------------

    The Commission does not believe that Commission monitoring

    of the treatment of confidential whistleblower information by a

    receiving authority is necessary. Receiving authorities are bound by

    the same confidentiality provisions as the Commission. The Commission

    makes sure that a receiving authority understands these limitations

    when it shares confidential whistleblower information with them.

    D. Antitrust Considerations

    Section 15(b) of the CEA requires the Commission to consider the

    public interests protected by the antitrust laws and to take actions

    involving the least anti-competitive means of achieving the objectives

    of the CEA. The Commission believes that the rules may have a positive

    effect on competition through improving detection, deterrence, and

    remediation of potential violations of the CEA and Commission

    regulations.

    The Commission did not receive any comments on any antitrust

    considerations arising from the proposed amendments.

    E. Small Business Regulatory Enforcement Fairness Act

    Under the Small Business Regulatory Enforcement Fairness Act of

    1996 (SBREFA), Pub. L. 104-121 (March 29, 1996), as amended by Pub. L.

    110-28 (May 25, 2007), the Commission solicits data to determine

    whether a proposed rule constitutes a ``major'' rule. Under SBREFA, a

    rule is considered ``major'' where, if adopted, it results or is likely

    to result in:

    An annual effect on the economy of $100 million or more

    (either in the form of an increase or a decrease);

    A major increase in costs or prices for consumers or

    individual industries; or

    Significant adverse effects on competition, investment or

    innovation.

    If a rule is ``major,'' its effectiveness will generally be delayed

    for 60 days pending Congressional review.

    The Commission received no comments or data on: The potential

    annual effect on the economy; any increase in costs or prices for

    consumers or individual industries; and any potential effect on

    competition, investment or innovation and the Chairman certifies that

    these amendments do not constitute a ``major rule''.

    List of Subjects in 17 CFR Part 165

    Whistleblowing.

    For the reasons set forth in the preamble, the Commodity Futures

    Trading Commission amends 17 CFR part 165 as follows:

    PART 165--WHISTLEBLOWER RULES

    0

    1. The authority citation for part 165 is revised to read as follows:

    Authority: 7 U.S.C. 2, 5, 9, 12a(5), 13a, 13a-1, 13b, and 26.

    [[Page 24497]]

    0

    2. In Sec. 165.2, revise paragraphs (i)(2) and (3), (l)(1)(i), (l)(2),

    and (o) to read as follows:

    Sec. 165.2 Definitions.

    * * * * *

    (i) * * *

    (2) The whistleblower gave the Commission original information

    about conduct that was already under examination or investigation by

    the Commission, the Congress, any other authority of the federal

    government, a state Attorney General or securities regulatory

    authority, any registered entity, registered futures association, or

    self-regulatory organization (as defined in section 3(a) of the

    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), foreign futures

    authority, or the Public Company Accounting Oversight Board (except in

    cases where the whistleblower was an original source of this

    information as defined in paragraph (l) of this section), and the

    whistleblower's submission significantly contributed to the success of

    the action.

    (3) The whistleblower reported original information through an

    entity's internal whistleblower, legal, or compliance procedures for

    reporting allegations of possible violations of law before or at the

    same time the whistleblower reported them to the Commission; the entity

    later provided the whistleblower's information to the Commission, or

    provided results of an audit or investigation initiated in whole or in

    part in response to information the whistleblower reported to the

    entity; and the information the entity provided to the Commission

    satisfies either paragraph (i)(1) or (2) of this section. Under this

    paragraph (i)(3), the whistleblower must also submit the same

    information to the Commission in accordance with the procedures set

    forth in Sec. 165.3 within 180 days of providing it to the entity.

    * * * * *

    (l) * * *

    (1) * * *

    (i) In order to be considered an original source of information

    that the Commission receives from Congress, any other federal, state or

    local authority, a foreign futures authority, any registered entity,

    registered futures association, or any self-regulatory organization (as

    defined in section 3(a) of the Securities Exchange Act of 1934 (15

    U.S.C. 78c(a)), the whistleblower must have voluntarily given such

    authorities the information within the meaning of this part. In

    determining whether the whistleblower is the original source of

    information, the Commission may seek assistance and confirmation from

    one of the other entities or authorities described in this paragraph

    (l)(1)(i).

    * * * * *

    (2) Information first provided to another authority or person. If

    the whistleblower provides information to Congress, any other federal,

    state, or local authority, a foreign futures authority, a registered

    entity, a registered futures association, a self-regulatory

    organization (as defined in section 3(a) of the Securities Exchange Act

    of 1934 (15 U.S.C. 78c(a)), or to any of the persons described in

    paragraphs (g)(4) and (5) of this section, and the whistleblower,

    within 180 days, makes a submission to the Commission pursuant to Sec.

    165.3, as the whistleblower must do in order for the whistleblower to

    be eligible to be considered for an award, then, for purposes of

    evaluating the whistleblower's claim to an award under Sec. 165.7, the

    Commission will consider that the whistleblower provided original

    information as of the date of the whistleblower's original disclosure,

    report, or submission to one of these other authorities or persons. The

    whistleblower must establish the whistleblower's status as the original

    source of such information, as well as the effective date of any prior

    disclosure, report, or submission, to the Commission's satisfaction.

    The Commission may seek assistance and confirmation from the other

    authority or person in making this determination.

    * * * * *

    (o) Voluntary submission or voluntarily submitted. (1) The phrase

    ``voluntary submission'' or ``voluntarily submitted'' within the

    context of submission of original information to the Commission under

    this part, shall mean the provision of information made prior to any

    request from the Commission, Congress, any other federal or state

    authority, the Department of Justice, a registered entity, a registered

    futures association, or a self-regulatory organization (as defined in

    section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))

    to the whistleblower or anyone representing the whistleblower (such as

    an attorney) about a matter to which the information in the

    whistleblower's submission is relevant. If the Commission or any of

    these other authorities makes a request, inquiry, or demand to the

    whistleblower or the whistleblower's representative first, the

    whistleblower's submission will not be considered voluntary, and the

    whistleblower will not be eligible for an award, even if the

    whistleblower's response is not compelled by subpoena or other

    applicable law. For purposes of this paragraph (o), the whistleblower

    will be considered to have received a request, inquiry or demand if

    documents or information from the whistleblower is within the scope of

    a request, inquiry, or demand that the whistleblower's employer

    receives, unless, after receiving the documents or information from the

    whistleblower, the whistleblower's employer fails to provide the

    whistleblower's documents or information to the requesting authority in

    a timely manner.

    (2) In addition, the whistleblower's submission will not be

    considered voluntary if the whistleblower is under a pre-existing legal

    or contractual duty to report the violations that are the subject of

    the whistleblower's original information to the Commission, Congress,

    any other federal or state authority, the Department of Justice, a

    registered entity, a registered futures association, or a self-

    regulatory organization (as defined in section 3(a) of the Securities

    Exchange Act of 1934 (15 U.S.C. 78c(a)), or a duty that arises out of a

    judicial or administrative order.

    * * * * *

    0

    3. Amend Sec. 165.3 as follows:

    0

    a. Remove the introductory text; and

    0

    b. Revise paragraphs (a) introductory text and (a)(1).

    The revisions read as follows:

    Sec. 165.3 Procedures for submitting original information.

    (a) A whistleblower will need to submit the whistleblower's

    information to the Commission. A whistleblower may submit the

    whistleblower's information:

    (1) By completing and submitting a Form TCR online and submitting

    it electronically through the Commission's Web site at http://www.cftc.gov, or the Commission's Whistleblower Program Web site at

    www.whistleblower.gov; or

    * * * * *

    0

    4. In Sec. 165.4, revise paragraphs (a) introductory text and (a)(1)

    and (2) to read as follows:

    Sec. 165.4 Confidentiality.

    (a) In general. Section 23(h)(2) of the Commodity Exchange Act

    requires that the Commission not disclose information that could

    reasonably be expected to reveal the identity of a whistleblower,

    except that the Commission may disclose such information in the

    following circumstances, in accordance with the Privacy Act of 1974 (5

    U.S.C. 552a):

    (1) When disclosure is required to a defendant or respondent in

    connection

    [[Page 24498]]

    with a public proceeding that the Commission institutes or in another

    public proceeding that is filed by an authority to which the Commission

    provides the information, as described in paragraph (a)(2) of this

    section; or

    (2) When the Commission determines that it is necessary to

    accomplish the purposes of the Commodity Exchange Act and to protect

    customers, it may provide whistleblower information, without the loss

    of its status as confidential whistleblower information in the hands of

    the Commission, to: The Department of Justice; an appropriate

    department or agency of the Federal Government, acting within the scope

    of its jurisdiction; a registered entity, registered futures

    association, or a self-regulatory organization (as defined in section

    3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); a State

    attorney general in connection with a criminal investigation; any

    appropriate State department or agency, acting within the scope of its

    jurisdiction; or a foreign futures authority; and, as set forth in

    section 23(h)(2)(C) of the Commodity Exchange Act, each such entity is

    required to maintain the information as confidential in accordance with

    the requirements of section 23(h)(2)(A) of the Commodity Exchange Act.

    * * * * *

    0

    5. Revise Sec. 165.5 to read as follows:

    Sec. 165.5 Requirements for consideration of an award.

    (a) Subject to the eligibility requirements described in this part,

    the Commission will pay an award to one or more whistleblowers who:

    (1) Provide a voluntary submission to the Commission;

    (2) That contains original information; and

    (3) That leads to the successful resolution of a covered judicial

    or administrative action or successful enforcement of a Related Action

    or both; and

    (b) In order to be eligible, the whistleblower must:

    (1) Have voluntarily provided the Commission original information

    in the form and manner that the Commission requires in Sec. 165.3;

    (2) Have submitted a claim in response to a Notice of Covered

    Action or a final judgment in a Related Action or both;

    (3) Provide the Commission, upon its staff's request, certain

    additional information, including:

    (i) Explanations and other assistance, in the manner and form that

    staff may request, in order that the staff may evaluate the use of the

    information submitted related to the whistleblower's application for an

    award;

    (ii) All additional information in the whistleblower's possession

    that is related to the subject matter of the whistleblower's submission

    related to the whistleblower's application for an award; and

    (iii) Testimony or other evidence acceptable to the staff relating

    to the whistleblower's eligibility for an award; and

    (4) If requested by the Whistleblower Office, enter into a

    confidentiality agreement in a form acceptable to the Whistleblower

    Office, including a provision that a violation of the confidentiality

    agreement may lead to the whistleblower's ineligibility to receive an

    award.

    (c) The Commission may, in its sole discretion, waive any

    procedural requirements based upon a showing of extraordinary

    circumstances.

    0

    6. In Sec. 165.6, revise paragraph (a)(1) to read as follows:

    Sec. 165.6 Whistleblowers ineligible for an award.

    (a) * * *

    (1) To any whistleblower who is, or was at the time the

    whistleblower acquired the original information submitted to the

    Commission, a member, officer, or employee of: the Commission; the

    Board of Governors of the Federal Reserve System; the Office of the

    Comptroller of the Currency; the Board of Directors of the Federal

    Deposit Insurance Corporation; the Director of the Office of Thrift

    Supervision; the National Credit Union Administration Board; the

    Securities and Exchange Commission; the Department of Justice; a

    registered entity; a registered futures association; a self-regulatory

    organization (as defined in section 3(a) of the Securities Exchange Act

    of 1934 (15 U.S.C. 78c(a)); or a law enforcement organization;

    * * * * *

    0

    7. Amend Sec. 165.7 as follows:

    0

    a. Revise the section heading;

    0

    b. Revise paragraphs (b), (d), and (e); and

    0

    c. Add paragraphs (f) through (l).

    The revisions and additions read as follows:

    Sec. 165.7 Procedures for award applications in Commission actions

    and related actions, and Commission award determinations.

    * * * * *

    (b)(1) To file a claim for a whistleblower award, the whistleblower

    must file Form WB-APP, Application for Award for Original Information

    Provided Pursuant to Section 23 of the Commodity Exchange Act. The

    whistleblower must sign this form as the claimant and submit it to the

    Commission by mail or fax to Commodity Futures Trading Commission,

    Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581, Fax

    (202) 418-5975, or by completing and submitting the Form WB-APP online

    and submitting it electronically through the Commission's Web site at

    https://www.cftc.gov or the Commission's Whistleblower Program Web site

    at https://www.whistleblower.gov.

    (2) The Form WB-APP, including any attachments, must be received by

    the Commission within 90 calendar days of the date of the Notice of

    Covered Action or 90 calendar days following the date of a final

    judgment in a Related Action (or if the final judgment in a Related

    Action was issued prior to the action meeting the definition of Related

    Action, within 90 calendar days following the date the action satisfied

    the definition of Related Action, except in the circumstances described

    in paragraph (b)(3)(ii) of this section). One Form WB-APP may be filed

    in response to both a Notice of Covered Action and final judgment in a

    Related Action if the relevant time periods are applicable.

    (3) If a covered judicial or administrative action and Related

    Action have different final judgment dates or if there is no covered

    judicial or administrative action connected to a Related Action, a

    claimant, who wishes to file a claim for an award in both a covered

    judicial or administrative action and a Related Action, or in a Related

    Action that does not have a connected covered judicial or

    administrative action, must follow one of the following procedures

    depending on that claimant's particular situation.

    (i) If a final judgment imposing monetary sanctions in a Related

    Action has not been entered at the time the claimant submits a claim

    for an award in connection with a covered judicial or administrative

    action, the claimant must submit the claim for the Related Action on

    Form WB-APP within ninety (90) calendar days following the date of

    issuance of a final judgment in the Related Action.

    (ii) If a final judgment in a Related Action has been entered and a

    Notice of Covered Action for a related covered judicial or

    administrative action has not been published, a claimant for an award

    in both the covered judicial or administrative action and Related

    Action may submit the claims for both the Related Action and the

    covered judicial or administrative action within ninety (90) days of

    the date of the Notice

    [[Page 24499]]

    of Covered Action. The claims may be submitted on the same Form WB-APP.

    (iii) If there is a final judgment in a Related Action that relates

    to a judicial or administrative action brought by the Commission under

    the Commodity Exchange Act that is not a covered judicial or

    administrative action, and therefore there is no Notice of Covered

    Action, a claimant for an award in connection with the Related Action

    must submit the claim in connection with the Related Action on Form WB-

    APP within ninety (90) calendar days following either:

    (A) The date of issuance of a final judgment in the Related Action,

    if that date is after the date of issuance of the final judgment in the

    related Commission judicial or administrative action; or

    (B) The date of issuance of the final judgment in the related

    Commission judicial or administrative action, i.e., the date the

    Related Action becomes a Related Action, if the date of issuance of the

    final judgment in the Related Action precedes the final judgment in the

    related Commission judicial or administrative action.

    * * * * *

    (d) A claimant may withdraw a Form WB-APP by submitting a written

    request to the Whistleblower Office at any time during the review

    process.

    (e)(1) The Whistleblower Office may issue a Proposed Final

    Disposition for award applications that do not relate to a Notice of

    Covered Action, a final judgment in a Related Action, or a previously

    filed Form TCR without presentation of the award claim to the staff

    designated by the Director of the Division of Enforcement under Sec.

    165.15(a)(2) (``Claims Review Staff''). In such instances, the

    Whistleblower Office will inform the award claimant in writing that the

    claim does not relate to a Notice of Covered Action, a final judgment

    in a Related Action, or a previously filed Form TCR and will be

    rejected unless the claimant provides additional information. The

    claimant will have 30 days from the date of the written notice to

    respond and to correct the identified deficiencies. If the claimant

    does not respond in 30 days or if the response does not include

    information showing that the WB-APP relates to a Notice of Covered

    Action, a final judgment in a Related Action, or a previously filed

    Form TCR the Whistleblower Office will issue a Proposed Final

    Disposition. The claimant's failure to submit a timely response to the

    written notice from the Whistleblower Office will constitute a failure

    to exhaust administrative remedies, and the claimant will be prohibited

    from pursuing an appeal under Sec. 165.13.

    (2) The Whistleblower Office will notify the Claims Review Staff of

    any Proposed Final Disposition under this paragraph (e). Within thirty

    (30) calendar days thereafter, any member of the Claims Review Staff

    may request that the Proposed Final Disposition be reviewed by the

    Claims Review Staff. If no member of the Claims Review Staff requests

    such a review within the 30-day period, then the Proposed Final

    Disposition will become the Final Order of the Commission. In the event

    that a member of the Claims Review Staff requests a review, the Claims

    Review Staff will review the record that the Whistleblower Office

    relied upon in making its determination and either remand to the

    Whistleblower Office for further action or issue a Final Order of the

    Commission, which could consist of the Proposed Final Disposition.

    (f)(1) In connection with each individual covered judicial or

    administrative action or final judgment in a Related Action, for which

    an award application is submitted, once the time for filing any appeals

    of the covered judicial or administrative action or the final judgment

    in the Related Action has expired (or, where an appeal is filed of the

    covered judicial or administrative action, or the final judgment in a

    Related Action, as applicable, and concluded), the Claims Review Staff

    designated under Sec. 165.15(a)(2) will evaluate all timely

    whistleblower award claims submitted on Form WB-APP in response to a

    Notice of Covered Action, referenced in paragraph (a) of this section,

    or final judgment in a Related Action in accordance with the criteria

    set forth in this part.

    (2) The Whistleblower Office may require that the claimant provide

    additional information relating to the claimant's eligibility for an

    award or satisfaction of any of the conditions for an award, as set

    forth in Sec. 165.5(b)(2). The Whistleblower Office may also request

    additional information from the claimant in connection with the claim

    for an award in a Related Action to demonstrate that the claimant

    directly (or through the Commission) voluntarily provided the

    governmental agency, regulatory authority or self-regulatory

    organization the original information that led to the Commission's

    successful covered action, and that the information provided by the

    claimant led to the successful enforcement of the Related Action. The

    Whistleblower Office may also, in its discretion, seek assistance and

    confirmation from the other agency in making this determination.

    (g)(1) Following Claims Review Staff evaluation, the Claims Review

    Staff will issue a Preliminary Determination setting forth a

    preliminary assessment as to whether the claim should be granted or

    denied and, if granted, setting forth the proposed award percentage

    amount. The Whistleblower Office will send a copy of the Preliminary

    Determination to the claimant.

    (2) The claimant may contest the Preliminary Determination made by

    the Claims Review Staff by submitting a written response to the

    Whistleblower Office setting forth the grounds for the claimant's

    objection to either the denial of an award or the proposed amount of an

    award. The response must be in the form and manner that the

    Whistleblower Office shall require. The claimant may also include

    documentation or other evidentiary support for the grounds advanced in

    the claimant's response. The claimant may also request a meeting with

    the Whistleblower Office within the timeframes provided in this

    paragraph (g), however such meetings are not required, and the

    Whistleblower Office may in its sole discretion deny the request.

    (i) Before determining whether to contest a Preliminary

    Determination, the claimant may, within thirty (30) days of the date of

    the Preliminary Determination, request that the Whistleblower Office

    make available for the claimant's review the materials from among those

    set forth in Sec. 165.10 that formed the basis of the Claims Review

    Staff's Preliminary Determination.

    (ii) If the claimant decides to contest the Preliminary

    Determination, the claimant must submit the claimant's written response

    and supporting materials setting forth the grounds for the claimant's

    objection to either the denial of an award or the proposed amount of an

    award within sixty (60) calendar days of the date of the Preliminary

    Determination, or if a request to review materials used to make a

    Preliminary Determination is made pursuant to paragraph (g)(2)(i) of

    this section, then within sixty (60) calendar days of the Whistleblower

    Office making those materials available for the claimant's review. The

    claimant also may request a meeting with the Whistleblower Office

    within those same sixty (60) calendar days. However, such meetings are

    not required and the Whistleblower Office may in its sole discretion

    decline the request.

    (h) If the claimant fails to submit a timely response pursuant to

    paragraph (g) of this section, then the Preliminary Determination will

    become the Final Order of the Commission (except where

    [[Page 24500]]

    the Preliminary Determination recommended an award, in which case the

    Preliminary Determination will be deemed a Proposed Final Determination

    for purposes of paragraph (j) of this section). The claimant's failure

    to submit a timely response contesting a Preliminary Determination will

    constitute a failure to exhaust administrative remedies, and the

    claimant will be prohibited from pursuing an appeal under Sec. 165.13.

    (i) If the claimant submits a timely response under paragraph (g)

    of this section, then the Claims Review Staff will consider the issues

    and grounds advanced in the claimant's response, along with any

    supporting documentation the claimant provided, and will make its

    Proposed Final Determination.

    (j) The Whistleblower Office will notify the Commission of each

    Proposed Final Determination. Within thirty (30) calendar days

    thereafter, any Commissioner may request that the Proposed Final

    Determination be reviewed by the Commission. If no Commissioner

    requests such a review within the 30-day period, then the Proposed

    Final Determination will become the Final Order of the Commission. In

    the event a Commissioner requests a review, the Commission will review

    the record that the staff relied upon in making its determinations,

    including the claimant's submissions to the Whistleblower Office, and

    issue its Final Order.

    (k) A Preliminary Determination, Proposed Final Disposition, or a

    Proposed Final Determination may be issued only after a review for

    legal sufficiency by the Office of the General Counsel.

    (l) The Office of the Secretariat will serve the claimant with the

    Final Order of the Commission.

    0

    8. In Sec. 165.9, revise the introductory text to read as follows:

    Sec. 165.9 Criteria for determining amount of award.

    The determination of the amount of an award shall be in the

    discretion of the Commission. This discretion shall be exercised as

    prescribed by Sec. 165.7.

    * * * * *

    0

    9. Amend Sec. 165.10 as follows:

    0

    a. Revise the section heading;

    0

    b. Remove the word ``and'' at the end of paragraph (a)(6);

    0

    c. Remove the period at the end of paragraph (a)(7) and add a semicolon

    in its place;

    0

    d. Add paragraphs (a)(8) and (9); and

    0

    e. Revise paragraph (b).

    The revisions and additions read as follows:

    Sec. 165.10 Contents of record for award determination.

    (a) * * *

    (8) With respect to an award claim involving a Related Action, any

    statements or other information that an entity provides or identifies

    in connection with an award determination, provided the entity has

    authorized the Commission to share the information with the claimant.

    (Neither the Commission nor the Claims Review Staff may rely upon

    information that the entity has not authorized the Commission to share

    with the applicant); and

    (9) Any other documents or materials including sworn declarations

    from third-parties that are received or obtained by the Whistleblower

    Office to assist the Commission resolve the applicant's award

    application, including information related to the claimant's

    eligibility. (Neither the Commission nor the Claims Review Staff may

    rely upon information that a third party has not authorized the

    Commission to share with the claimant).

    (b) The rules in this part do not entitle a claimant to obtain from

    the Commission any materials (including any pre-decisional or internal

    deliberative process materials that are prepared to assist the

    Commission or Claims Review Staff in deciding the claim) other than

    those listed in paragraph (a) of this section. The Whistleblower Office

    may make redactions as necessary to comply with any statutory

    restrictions, to protect the Commission's law enforcement and

    regulatory functions, and to comply with requests for confidential

    treatment from other law enforcement and regulatory authorities.

    0

    10. Revise Sec. 165.11 to read as follows:

    Sec. 165.11 Awards based upon related actions.

    (a) Provided that a whistleblower or whistleblowers comply with the

    requirements in Sec. Sec. 165.3, 165.5 and 165.7, and pursuant to

    Sec. 165.8, the Commission may grant an award based on the amount of

    monetary sanctions collected in a ``Related Action'' or ``Related

    Actions'', where:

    (1) A ``Related Action'' is a judicial or administrative action

    that is brought by:

    (i) The Department of Justice;

    (ii) An appropriate department or agency of the Federal Government,

    acting within the scope of its jurisdiction;

    (iii) A registered entity, registered futures association, or self-

    regulatory organization (as defined in section 3(a) of the Securities

    Exchange Act of 1934 (15 U.S.C. 78c(a));

    (iv) A State criminal or appropriate civil agency, acting within

    the scope of its jurisdiction; or

    (v) A foreign futures authority; and

    (2) The ``Related Action'' is based on the original information

    that the whistleblower voluntarily submitted to the Commission and led

    to a successful resolution of the Commission judicial or administrative

    action.

    (b) The Commission will not make an award to a claimant for a final

    judgment in a Related Action if the claimant has already been granted

    an award by the Securities and Exchange Commission (SEC) for that same

    action pursuant to its whistleblower award program under section 21F of

    the Securities Exchange Act (15 U.S.C. 78a et seq.). If the SEC has

    previously denied an award to the claimant for a judgment in a Related

    Action, the whistleblower will be precluded from relitigating any

    issues before the Commission that the SEC resolved against the claimant

    as part of the award denial.

    0

    11. In Sec. 165.12, revise paragraph (c) to read as follows:

    Sec. 165.12 Payment of awards from the Fund, financing of customer

    education initiatives, and deposits and credits to the Fund.

    * * * * *

    (c) Office of Customer Education and Outreach. The Commission shall

    undertake and maintain customer education initiatives through its

    Office of Customer Education and Outreach. The initiatives shall be

    designed to help customers protect themselves against fraud or other

    violations of the Commodity Exchange Act, or the rules or regulations

    thereunder. The Commission shall fund the initiatives and may utilize

    funds deposited into the Fund during any fiscal year in which the

    beginning (October 1) balance of the Fund is greater than $10,000,000.

    The Commission shall budget, on an annual basis, the amount used to

    finance customer education initiatives, taking into consideration the

    balance of the Fund.

    0

    12. Revise Sec. 165.13 to read as follows:

    Sec. 165.13 Appeals.

    (a) Any Final Order of the Commission relating to a whistleblower

    award determination, including whether, to whom, or in what amount to

    make whistleblower awards, may be appealed to the appropriate court of

    appeals of the United States not more than 30 days after the Final

    Order of the Commission is issued, provided that administrative

    remedies have been exhausted.

    [[Page 24501]]

    (b) The record on appeal shall consist of:

    (1) The Contents of Record for Award Determinations, as set forth

    in Sec. 165.10. The record on appeal shall not include any pre-

    decisional or internal deliberative process materials that are prepared

    to assist the Commission or the Claims Review Staff in deciding the

    claim (including staff's draft Preliminary Determination or any

    Proposed Final Determination or staff's draft final determination); and

    (2) The Preliminary Determination and the Final Order of the

    Commission, as set forth in Sec. 165.7.

    0

    13. Revise Sec. 165.15 to read as follows:

    Sec. 165.15 Administering the whistleblower program.

    (a) Specific authorities--(1) Payments, deposits, and credits. The

    Executive Director is authorized to deposit into or credit collected

    monetary sanctions to the Fund, and to make payment of awards

    therefrom, with the concurrence of the General Counsel and the Director

    of the Division of Enforcement, or of their respective designees.

    (2) Designation of claims review staff. The Claims Review Staff

    referenced in Sec. 165.7 shall be composed of no fewer than three and

    no more than five staff members from any of the Commission's Offices or

    Divisions (except the Office of General Counsel) who have not had

    direct involvement in the underlying enforcement action, as designated

    by the Director of the Division of Enforcement in consultation with the

    Executive Director. The Claims Review Staff will always include at

    least one staff member who does not work in the Division of

    Enforcement.

    (3) Disclosure of whistleblower identifying information. The

    Director of the Division of Enforcement is authorized on behalf of the

    Commission to exercise its discretion to disclose whistleblower

    identifying information under Sec. 165.4(a).

    (b) General authority to administer the program. The Director of

    the Division of Enforcement shall have general authority to administer

    the whistleblower program except as otherwise provided under this part.

    0

    14. Revise Sec. 165.19 to read as follows:

    Sec. 165.19 Nonenforceability of certain provisions waiving rights

    and remedies or requiring arbitration of disputes.

    (a) Non-waiver. The rights and remedies provided for in this part

    may not be waived by any agreement, policy, form, or condition of

    employment, including by a predispute arbitration agreement. No

    predispute arbitration agreement shall be valid or enforceable if the

    agreement requires arbitration of a dispute arising under this part.

    (b) Protected communications. No person may take any action to

    impede an individual from communicating directly with the Commission's

    staff about a possible violation of the Commodity Exchange Act,

    including by enforcing, or threatening to enforce, a confidentiality

    agreement or predispute arbitration agreement with respect to such

    communications.

    0

    15. Add Sec. 165.20 to read as follows:

    Sec. 165.20 Whistleblower anti-retaliation protections.

    (a) In general. No employer may discharge, demote, suspend,

    directly or indirectly threaten or harass, or in any other manner

    discriminate against, a whistleblower in the terms and conditions of

    employment because of any lawful act done by the whistleblower--

    (1) In providing information to the Commission in accordance with

    this part; or

    (2) In assisting in any investigation or judicial or administrative

    action of the Commission based upon or related to such information.

    (b) Anti-retaliation enforcement. Section 23(h)(1)(A) of the

    Commodity Exchange Act (7 U.S.C. 26(h)(1)), including the rules in this

    part promulgated thereunder, shall be enforceable in an action or

    proceeding brought by the Commission including where retaliation is in

    response to a whistleblower providing information to the Commission

    after reporting the information through internal whistleblower, legal

    or compliance procedures.

    (c) Protections apply regardless of non-qualification. The anti-

    retaliation protections apply whether or not the whistleblower

    satisfies the requirements, procedures, and conditions to qualify for

    an award.

    0

    16. Revise appendix A to part 165 to read as follows:

    Appendix A to Part 165--Guidance With Respect to the Protection of

    Whistleblowers Against Retaliation

    (a) In general. Section 23(h)(1) of Commodity Exchange Act

    prohibits employers from engaging in retaliation against

    whistleblowers. A violation of this provision could be addressed by a

    Commission enforcement action, or a lawsuit by an individual. Section

    23(h)(1)(B) provides for a federal cause of action brought by the

    whistleblower against the employer, which must be filed in the

    appropriate district court of the United States within two (2) years of

    the employer's retaliatory act, and potential relief for prevailing

    whistleblowers, including reinstatement, back pay, and compensation for

    other expenses, including reasonable attorney's fees.

    (b) Enforcement--(1) Private cause of action. (i) An individual who

    alleges discharge, demotion, suspension, direct or indirect threats or

    harassment, or any other manner of discrimination in violation of

    section 23(h)(1)(A) of the Commodity Exchange Act may bring an action

    under section 23(h)(1)(B) of the Commodity Exchange Act in the

    appropriate district court of the United States for the relief provided

    in section 23(h)(1)(C) of the Commodity Exchange Act, unless the

    individual who is alleging discharge or other discrimination in

    violation of section 23(h)(1)(A) of the Commodity Exchange Act is an

    employee of the Federal Government, in which case the individual shall

    only bring an action under section 1221 of title 5, United States Code.

    (ii) Subpoenas. A subpoena requiring the attendance of a witness at

    a trial or hearing conducted under section 23(h)(1)(B)(ii) of the

    Commodity Exchange Act may be served at any place in the United States.

    (iii) Statute of limitations. A private cause of action under

    section 23(h)(1)(B) of the Commodity Exchange Act may not be brought

    more than 2 years after the date on which the violation reported in

    section 23(h)(1)(A) of the Commodity Exchange Act is committed.

    (iv) Relief. Relief for an individual prevailing in an action

    brought under section 23(h)(1)(B) of the Commodity Exchange Act shall

    include--

    (A) Reinstatement with the same seniority status that the

    individual would have had, but for the discrimination;

    (B) The amount of back pay otherwise owed to the individual, with

    interest; and

    (C) Compensation for any special damages sustained as a result of

    the discharge or discrimination, including litigation costs, expert

    witness fees, and reasonable attorney's fees.

    (2) Commission authority to bring action. The Commission may bring

    an enforcement action against an employer that retaliates against a

    whistleblower by discharge, demotion, suspension, direct or indirect

    threats or harassment, or any other manner of discrimination.

    0

    17. Add appendix B to part 165 to read as follows:

    Appendix B to Part 165--Form TCR and Form WP-APP

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    Submission Procedures

    Questions concerning this form may be directed to Commodity Futures

    Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155

    21st Street NW., Washington, DC 20581.

    If you are submitting information for the CFTC's

    whistleblower award program, you must submit your information using

    this Form TCR.

    You may submit this form electronically, through the Web

    portal found on the CFTC's Web site at http://www.whistleblower.gov.

    You may also print this form and submit it by mail to Commodity Futures

    Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155

    21st Street, NW., Washington, DC 20581, or by facsimile to (202) 418-

    5975.

    You have the right to submit information anonymously. If

    you do not submit anonymously, please note that the CFTC is required by

    law to maintain the confidentiality of any information which could

    reasonably identify you, and will only reveal such information in

    limited and specifically-defined circumstances. See 7 U.S.C. 26(h)(2);

    17 CFR 165.4. However, in order to receive a whistleblower award, you

    will need to be identified to select CFTC staff for a final eligibility

    determination, and in unusual circumstances, you may need to be

    identified publicly for trial. You should therefore provide some means

    for the CFTC's staff to contact you, such as a telephone number or an

    email address.

    Instructions for Completing Form TCR

    General

    All references to ``you'' and ``your'' are intended to mean the

    complainant.

    Section A: Tell Us About Yourself

    Questions 1-14: Please provide the following information about

    yourself:

    [ballot] last name, first name and middle initial;

    [ballot] complete address, including city, state and zip code;

    [ballot] telephone number and, if available, an alternate number where

    you can be reached;

    [ballot] your email address (to facilitate communications, we strongly

    encourage you to provide an email address, especially if you are filing

    anonymously);

    [ballot] your preferred method of communication; and

    [ballot] your occupation.

    Section B: Your Attorney's Information

    Complete this section only if you are represented by an attorney in

    this matter.

    Questions 1-10: Provide the following information about your

    attorney:

    [ballot] attorney's name;

    [ballot] firm name;

    [ballot] complete address, including city, state and zip code;

    [ballot] telephone number and fax number; and

    [ballot] email address.

    Section C: Tell Us Who You Are Complaining About

    Question 1-2: Choose one of the following that best describes the

    individual's profession or the type of entity to which your complaint

    relates:

    For Individuals: accountant, analyst, associated person, attorney,

    auditor, broker, commodity trading advisor, commodity pool operator,

    compliance officer, employee, executing broker, executive officer or

    director, financial planner, floor broker, floor trader, trader,

    unknown or other (specify).

    For Entities: bank, commodity pool, commodity pool operator,

    commodity trading advisor, futures commission merchant, hedge fund,

    introducing broker, major swap participant, retail foreign exchange

    dealer, swap dealer, unknown or other (specify).

    Questions 3-12: For each individual and/or entity, provide the

    following information, if known:

    [ballot] full name;

    [ballot] complete address, including city, state and zip code;

    [ballot] telephone number;

    [ballot] email address; and

    [ballot] internet address, if applicable.

    Questions 13: If the firm or individual you are complaining about

    has custody or control of your investment, identify whether you have

    had difficulty contacting that firm or individual.

    Question 14: Identify if you are, or were, associated with the

    individual or firm you are complaining about. If yes, describe how you

    are, or were, associated with the individual or firm you are

    complaining about.

    Question 15: Identify the initial form of contact between you and

    the person against whom you are filing this complaint.

    Section D: Tell Us About Your Complaint

    Question 1: State the date (mm/dd/yyyy) that the alleged conduct

    occurred or began.

    Question 2: Identify if the conduct is on-going.

    Question 3: Choose the option that you believe best describes the

    nature of your complaint. If you are alleging more

    [[Page 24514]]

    than one violation, please list all that you believe may apply.

    Question 4: Select the type of product or instrument you are

    complaining about.

    Question 5: If applicable, please name the product or instrument.

    If yes, please describe.

    Question 6: Identify whether you have suffered a monetary loss. If

    yes, please describe.

    Question 7: Identify if the individual or firm you are complaining

    about acknowledged their fault.

    Question 8: Indicate whether you have taken any other action

    regarding your complaint, including whether you complained to the CFTC,

    another regulator, a law enforcement agency, or any other agency or

    organization, or initiated legal action, mediation, arbitration or any

    other action.

    If you answered yes, provide details, including the date on which

    you took the action(s) described, the name of the person or entity to

    whom you directed any report or complaint, and contact information for

    the person or entity, if known, and the complete case name, case number

    and forum of any legal action you have taken.

    Question 9: State in detail all facts pertinent to the alleged

    violation. Explain why you believe the facts described constitute a

    violation of the Commodity Exchange Act.

    Question 10: Describe all supporting materials in your possession

    and the availability and location of any additional supporting

    materials not in your possession.

    Section E: Whistleblower Program

    Question 1: Describe how you obtained the information that supports

    your allegations. If any information was obtained from an attorney or

    in a communication where an attorney was present, identify such

    information with as much particularity as possible. In addition, if any

    information was obtained from a public source, identify the source with

    as much particularity as possible.

    Question 2: Identify any documents or other information in your

    submission on this Form TCR that you believe could reasonably be

    expected to reveal your identity. Explain the basis for your belief

    that your identity would be revealed if the documents or information

    were disclosed to a third party.

    Question 3: State whether you or your attorney have had any prior

    communication(s) with the CFTC concerning this matter.

    If you answered ``yes'', identify the CFTC staff member(s) with

    whom you or your attorney communicated.

    Question 4: Indicate whether you or your attorney have provided the

    information you are providing to the CFTC to any other agency or

    organization, or whether any other agency or organization has requested

    the information or related information from you.

    If you answered ``yes'', provide details and the name and contact

    information of the point of contact at the other agency or

    organization, if known.

    Question 5: Indicate whether your complaint relates to an entity of

    which you are, or were in the past, an officer, director, counsel,

    employee, consultant or contractor.

    If you answered ``yes'', state whether you have reported this

    violation to your supervisor, compliance office, whistleblower hotline,

    ombudsman, or any other available mechanism at the entity for reporting

    violations. Please provide details, including the date on which you

    took the action.

    Question 6: Indicate whether you have taken any other action

    regarding your complaint, including whether you complained to the CFTC,

    another regulator, a law enforcement agency, or any other agency or

    organization, or initiated legal action, mediation, arbitration or any

    other action.

    If you answered ``yes'', provide details, including the date on

    which you took the action(s) described, the name of the person or

    entity to whom you directed any report or complaint, and contact

    information for the person or entity, if known, and the complete case

    name, case number and forum of any legal action you have taken.

    Question 7: Provide any additional information you think may be

    relevant.

    Section F: Whistleblower Eligibility Requirements and Other Information

    Question 1: State whether you are currently, or were at the time

    that you acquired the original information that you are submitting to

    the CFTC, a member, officer or employee of: The CFTC; the Board of

    Governors of the Federal Reserve System; the Office of the Comptroller

    of the Currency; the Board of Directors of the Federal Deposit

    Insurance Corporation; the Director of the Office of Thrift

    Supervision; the National Credit Union Administration Board; the

    Securities and Exchange Commission; the Department of Justice; a

    registered entity; a registered futures association; a self-regulatory

    organization (as defined in 3(a) of the Securities Exchange Act of 1934

    (15 U.S.C. 78c(a)); a law enforcement organization; or a foreign

    regulatory authority or law enforcement organization.

    Question 2: State whether you are providing the information

    pursuant to a cooperation agreement with the CFTC or with another

    agency or organization.

    Question 3: State whether you are providing this information before

    you (or anyone representing you) received any request, inquiry or

    demand that relates to the subject matter of this submission (i) from

    the CFTC, (ii) in connection with an investigation, inspection or

    examination by any registered entity, registered futures association or

    self-regulatory organization (as defined in 3(a) of the Securities

    Exchange Act of 1934 (15 U.S.C. 78c(a)), or (iii) in connection with an

    investigation by the Congress, or any other federal or state authority.

    Question 4: State whether you are currently a subject or target of

    a criminal investigation, or whether you have been convicted of a

    criminal violation, in connection with the information you are

    submitting to the CFTC.

    Question 5: State whether you acquired the information you are

    providing to the CFTC from any individual described in Questions 1

    through 4 of this section.

    Question 6: If you answered yes to any of Questions 1 through 5,

    please provide details.

    Section G: Privacy Notice and Whistleblower's Declaration

    You must sign this Declaration if you are submitting this

    information pursuant to the CFTC whistleblower program and wish to be

    considered for an award. If you are submitting your information using

    the electronic version of Form TCR through the CFTC's web portal, you

    must check the box to agree with the declaration. If you are submitting

    your information anonymously, you must still sign this Declaration

    (using the term ``anonymous'') or check the box as appropriate, and, if

    you are represented by an attorney, you must provide your attorney with

    the original of this signed form, or maintain a copy for your own

    records.

    Section H: Counsel Certification

    If you are submitting this information pursuant to the CFTC

    whistleblower program and you are doing so anonymously through an

    attorney, your attorney must sign the Counsel Certification Section. If

    your attorney is submitting your information using the electronic

    version of Form TCR through the CFTC's web portal, he/she must check

    the box to agree with the

    [[Page 24515]]

    certification. If you are represented in this matter but you are not

    submitting your information pursuant to the CFTC whistleblower program,

    your attorney does not need to sign this Certification or check the

    box.

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    Privacy Act Statement

    This notice is given under the Privacy Act of 1974. The Privacy Act

    requires that the Commodity Futures Trading Commission (CFTC) inform

    individuals of the following when asking for information. The

    solicitation of this information is authorized under the Commodity

    Exchange Act, 7 U.S.C. 1 et seq. The information provided will enable

    the CFTC to determine the whistleblower award claimant's eligibility

    for payment of an award pursuant to Section 23 of the Commodity

    Exchange Act and Part 165 of the CFTC's regulations. This information

    will be used to investigate and prosecute violations of the Commodity

    Exchange Act and the CFTC's regulations. This information may be

    disclosed to federal, state, local or foreign agencies or other

    authorities responsible for investigating, prosecuting, enforcing or

    implementing laws, rules or regulations implicated by the information

    consistent with the confidentiality requirements set forth in Section

    23 of the Commodity Exchange Act and Part 165 of the CFTC's

    regulations. The information will be maintained and additional

    disclosures may be made in accordance with System of Records Notices

    CFTC-49, ``Whistleblower Records'' (exempted), CFTC-10, ``Investigatory

    Records'' (exempted), and CFTC-16, ``Enforcement Case Files.'' The CFTC

    requests the last four digits of the claimant's Social Security Number

    for use as an individual identifier to administer and manage the

    whistleblower award program. Executive Order 9397 (November 22, 1943)

    allows federal agencies to use the Social Security Number as an

    individual identifier. Furnishing the information is voluntary.

    However, if an individual is providing information for the

    whistleblower award program, not providing required information may

    result in the individual not being eligible for award consideration.

    Questions concerning this form may be directed to Commodity Futures

    Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155

    21st Street NW., Washington, DC 20581.

    Submission Procedures

    This form must be used by persons making a claim for a

    whistleblower award in connection with information provided to the

    CFTC, or to another agency or organization in a related action. In

    order to be deemed eligible for an award, you must meet all the

    requirements set forth in Section 23 of the Commodity Exchange Act and

    Part 165 of the CFTC's regulations.

    You must sign the Form WB-APP as the claimant. If you wish

    to submit the Form WB-APP anonymously, you must do so through an

    attorney, your attorney must sign the Counsel Certification Section of

    the Form WB-APP that is submitted to the CFTC, and you must give your

    attorney your original signed Form WB-APP so that it can be produced to

    the CFTC upon request.

    During the whistleblower award claim process, your

    identity must be verified in a form and manner that is acceptable to

    the CFTC prior to the payment of any award.

    [cir] If you are filing your claim in connection with information

    that you provided to the CFTC, then your Form WB-APP, and any

    attachments thereto, must be received by the CFTC within ninety (90)

    days of the date of the Notice of Covered Action, or the date of a

    final

    [[Page 24520]]

    judgment in a related action to which the claim relates.

    [cir] If you are filing your claim in connection with information

    that you provided to another agency or organization in a related

    action, then your Form WB-APP, and any attachments thereto, must be

    received by the CFTC as follows:

    If a final order imposing monetary sanctions has been

    entered in a related action at the time that you submit your claim for

    an award in connection with a CFTC action, you may submit your claim

    for an award in that related action on the same Form WB-APP that you

    use for the CFTC action.

    If a final order imposing monetary sanctions in a related

    action has not been entered at the time that you submit your claim for

    an award in connection with a CFTC action, you must submit your claim

    on Form WB-APP within ninety (90) days of the issuance of a final order

    imposing sanctions in the related action.

    If a final order imposing monetary sanctions in a related

    action relates to a judicial or administrative action brought by the

    Commission under the Commodity Exchange Act that is not a covered

    judicial or administrative action, and therefore there would not be a

    Notice of Covered Action, you must submit your claim on Form WB-APP for

    an award in connection with the related action within ninety (90)

    calendar days following either (1) the date of issuance of a final

    order in the related action, if that date is after the date of issuance

    of the final judgment in the related Commission judicial or

    administrative action; or (2) the date of issuance of the final

    judgment in the related Commission judicial or administrative action,

    i.e., the date the related action becomes a related action, if the date

    of issuance of the final order in the related action precedes the final

    judgment in the related Commission judicial or administrative action.

    To submit your Form WB-APP, you may print it and either

    submit it by mail to Commodity Futures Trading Commission,

    Whistleblower Office, Three Lafayette Centre, 1155 21st Street NW.,

    Washington, DC 20581, or by facsimile to (202) 418-5975. You also may

    submit this form electronically, through the web portal found on the

    CFTC's Web site at http://www.cftc.gov, which is also accessible from

    the CFTC Whistleblower Program Web site at www.whistleblower.gov.

    Instructions for Completing Form WB-APP

    General

    All references to ``you'' and ``your'' are intended to mean the

    whistleblower award claimant.

    Section A: Tell Us About Yourself

    Questions 1-3: Please provide the following information about yourself:

    last name, first name, middle initial and the last four

    digits of your Social Security Number;

    complete address, including city, state and zip code;

    telephone number and, if available, an alternate number

    where you can be reached; and

    your email address (to facilitate communications, we

    strongly encourage you to provide an email address, especially if you

    are making your claim anonymously).

    Section B: Your Attorney's Information

    Complete this section only if you are represented by an attorney in

    this matter. Questions 1-4: Provide the following information about

    your attorney:

    attorney's name;

    firm name;

    complete address, including city, state and zip code;

    telephone number and fax number; and

    email address.

    Section C: Tell Us About Your Tip or Complaint

    Question 1a: Indicate the manner in which you submitted your

    original information to the CFTC.

    Question 1b: Provide the date on which you submitted your original

    information to the CFTC.

    Question 2a: State whether you filed a CFTC Form TCR.

    Question 2b: If you filed a CFTC Form TCR, provide the Form's

    number.

    Question 2c: If you filed a CFTC Form TCR, provide the date on

    which you filed the Form.

    Question 3: Provide the name(s) of the individual(s) and/or

    entity(s) to which your tip or complaint relates.

    Section D: Notice of Covered Action

    The process for making a claim for a whistleblower award for a CFTC

    action begins with the publication of a ``Notice of Covered Action'' on

    the CFTC's Web site. This Notice is published whenever a judicial or

    administrative action brought by the CFTC results in the imposition of

    monetary sanctions exceeding $1,000,000. The Notice is published on the

    CFTC's Web site subsequent to the entry of a final judgment or order in

    the action that by itself, or collectively with other judgments or

    orders previously entered in the action, exceeds the $1,000,000

    threshold required for a whistleblower to be potentially eligible for

    an award. The CFTC will not contact whistleblower claimants directly as

    to Notices of Covered Actions; prospective claimants should monitor the

    CFTC Web site for such Notices.

    Question 1: Provide the date of the Notice of Covered Action to

    which this claim relates.

    Question 2: Provide the notice number of the Notice of Covered

    Action.

    Question 3a: Provide the case name referenced in the Notice of

    Covered Action.

    Question 3b: Provide the case number referenced in the Notice of

    Covered Action.

    Section E: Claims Pertaining to Related Actions

    Question 1: Provide the name of the agency or organization to which

    you provided your information.

    Question 2: Provide the name and contact information for your point

    of contact at the agency or organization, if known.

    Question 3a: Provide the date on which you provided your

    information to the agency or organization referenced in Question 1 of

    this section.

    Question 3b: Provide the date on which the agency or organization

    referenced in Question 1 of this section filed the related action that

    was based upon the information that you provided.

    Question 4a: Provide the case name of the related action.

    Question 4b: Provide the case number of the related action.

    Section F: Eligibility Requirements and Other Information

    Question 1: State whether you are currently, or were at the time

    that you acquired the original information that you submitted to the

    CFTC, a member, officer or employee of: The CFTC; the Board of

    Governors of the Federal Reserve System; the Office of the Comptroller

    of the Currency; the Board of Directors of the Federal Deposit

    Insurance Corporation; the Director of the Office of Thrift

    Supervision; the National Credit Union Administration Board; the

    Securities and Exchange Commission; the Department of Justice; a

    registered entity; a registered futures association; a self-regulatory

    organization; a law enforcement organization; or a foreign regulatory

    authority or law enforcement organization.

    [[Page 24521]]

    Question 2: State whether you provided the information that you

    submitted to the CFTC pursuant to a cooperation agreement with the

    CFTC, or with any other agency or organization.

    Question 3: State whether you provided this information before you

    (or anyone representing you) received any request, inquiry or demand

    that relates to the subject matter of your submission (i) from the

    CFTC, (ii) in connection with an investigation, inspection or

    examination by any registered entity, registered futures association or

    self-regulatory organization, or (iii) in connection with an

    investigation by the Congress, or any other federal or state authority.

    Question 4: State whether you are currently a subject or target of

    a criminal investigation, or whether you have been convicted of a

    criminal violation, in connection with the information that you

    submitted to the CFTC and upon which your application for an award is

    based.

    Question 5: State whether you acquired the information that you

    provided to the CFTC from any individual described in Questions 1

    through 4 of this section.

    Question 6: If you answered yes to any of Questions 1 through 5 of

    this section, please provide details.

    Section G: Entitlement to Award

    This section is optional. Use this section to explain the basis for

    your belief that you are entitled to an award in connection with your

    submission of information to the CFTC, or to another agency in

    connection with a related action. Specifically, address why you believe

    that you voluntarily provided the CFTC with original information that

    led to the successful enforcement of a judicial or administrative

    action filed by the CFTC, or a related action. Refer to Sec. 165.9 of

    the CFTC's regulations for further information concerning the relevant

    award criteria.

    Section 23(c)(1)(B) of the Commodity Exchange Act and Sec.

    165.9(a) of the CFTC's regulations require the CFTC to consider the

    following factors in determining the amount of an award: (1) The

    significance of the information provided by a whistleblower to the

    success of the CFTC action or related action; (2) the degree of

    assistance provided by the whistleblower and any legal representative

    of the whistleblower in the CFTC action or related action; (3) the

    programmatic interest of the CFTC in deterring violations of the

    Commodity Exchange Act (including regulations under the Act) by making

    awards to whistleblowers who provide information that leads to the

    successful enforcement of such laws; (4) whether the award otherwise

    enhances the CFTC's ability to enforce the Commodity Exchange Act,

    protect customers, and encourage the submission of high quality

    information from whistleblowers; and (5) potential adverse incentives

    from oversize awards. Address these factors in your response as well.

    Section H: Claimant's Declaration

    You must sign this Declaration if you are submitting this claim

    pursuant to the CFTC whistleblower program and wish to be considered

    for an award. If you are submitting your claim anonymously, you must do

    so through an attorney, and you must provide your attorney with your

    original signed Form WB-APP.

    Section I: Counsel Certification

    If you are submitting this claim pursuant to the CFTC whistleblower

    program anonymously, you must do so through an attorney, and your

    attorney must sign the Counsel Certification Section.

    Issued in Washington, DC, on May 22, 2017, by the Commission.

    Christopher J. Kirkpatrick,

    Secretary of the Commission.

    Note: The following appendix will not appear in the Code of

    Federal Regulations.

    Appendix to Whistleblower Awards Process--Commission Voting Summary

    On this matter, Acting Chairman Giancarlo and Commissioner Bowen

    voted in the affirmative. No Commissioner voted in the negative.

    [FR Doc. 2017-10801 Filed 5-26-17; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: May 30, 2017