August 4, 2011
I’m pleased to support all three of these final rulemakings today. Perhaps the most talked about of the three is the whistleblower rule. This new provision will be an important tool in the Commissions’ enforcement arsenal. It can give needed incentives for folks—precisely the people we want to hear from, those who have an eye “from the inside” on essential information about nefarious schemes—to come forward, with needed protections.
Frankly, this rule wasn’t too hot when we first proposed it. For example, there it didn’t provide for any kind of notification to the whistleblower if the agency actually used the information and successfully prosecuted—we fixed that. The proposal also had a very broad definition of excluded information—we fixed that. It would have incentivized internal reporting, rather than reporting to federal authorities—we fixed that. In short, the public comments we received surely gave us a lot of guidance on this one and I’m happy the process worked.
Now, I’m going to put a song in your head that you can whistle all day. One of my favorite television shows when I was a kid was "The Andy Griffith Show." I used to whistle that theme song over and over. I used to whistle it in the tunnels on Capitol Hill. It was a clear and clarion whistle. There was nothing in doubt about it at all. That's the type of whistleblower rules and regulations we need. Clear, consistent and concise—and I think this rule is just that.
Now, for those of you that are old enough let me put a second song in your head. In the late 1960s, there was a great song by the Fifth Dimension in the musical Hair called “Let the Sunshine In.” Some of you may remember it.
Well, that’s really what SDRs are all about – ‘letting the sunshine in’ to what we used to call these dark markets for swaps trading. I think this is at the heart of the reforms made by the Dodd-Frank Act. One important issue—and I’ve raised this before, specifically with large trader reporting—it has to do with timing, and the inter-relatedness of rules. It’s obvious that the application of this rule, and others to come, will be dependent on our promulgation of definitional rules, and I’ve asked staff to ensure that, in this rule and in all others, we are mindful of this issue to ensure that markets and participants have clarity as to when and how we’re applying rules.
Finally, I want to thank the Chairman and the staff for moving these rules forward. A few weeks ago, I said we need to put the pedal down on these rulemakings even though we had to delay some for good reason. Today, we bring three more rules to fruition, so thank you.
Last Updated: August 4, 2011