The Commodity Futures Trading Commission has finalized a rule that will automatically pay whistleblowers 30 percent of monetary sanctions collected in enforcement actions when the award amount is $5 million or less, a move designed to streamline a program that has struggled with payout delays.
The derivatives regulator announced the change on Friday, saying it would eliminate the need for case-by-case percentage determinations that have historically slowed down awards for the majority of tipsters. The automatic 30 percent figure represents the maximum share allowed under the program's statutory range of 10 to 30 percent.
The rule, proposed in June and now adopted in final form, aligns the CFTC's whistleblower program more closely with that of the Securities and Exchange Commission, which already uses a similar framework for smaller awards. Awards remain subject to commission discretion.
"The Whistleblower Program plays an important role in supporting the commission's enforcement programme," Raagnee Beri, director of the CFTC's Whistleblower Office, said in a statement. "This final rule will protect and enhance the programme's effectiveness and further incentivise whistle-blowers to report."
Established in the wake of the 2008 financial crisis under the Dodd-Frank Act, the CFTC's whistleblower program encourages individuals to submit original, timely information that helps the agency pursue enforcement actions against market manipulators,...
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