Proposed Rule2026-12006
Whistleblower Award Determination
Primary source
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Published
June 15, 2026
Issuing agencies
Commodity Futures Trading Commission
Abstract
The Commodity Futures Trading Commission ("Commission" or "CFTC") is proposing for public comment to amend its rules implementing a section of the Commodity Exchange Act ("CEA"). The relevant section provides, among other things, that the Commission shall pay an award--under regulations prescribed by the Commission and subject to certain limitations--to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the CEA, or regulations thereunder, that leads to the successful enforcement of a covered judicial or administrative action, or a related action. The Commission expects the proposed substantive amendment, which is modeled on a similar provision in the Securities and Exchange Commission's ("SEC's") regulations, to increase the efficiency, transparency, and predictability of whistleblower claims processing, thereby protecting and enhancing the program's effectiveness in incentivizing whistleblowers to report. The Commission is also incorporating technical corrections to the whistleblower rules to update regulatory references to reflect the Whistleblower Office's ("WBO's") move in 2025, consistent with its adjudicatory functions, to the Office of the General Counsel.
Full Text
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<title>Federal Register, Volume 91 Issue 114 (Monday, June 15, 2026)</title>
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[Federal Register Volume 91, Number 114 (Monday, June 15, 2026)]
[Proposed Rules]
[Pages 35914-35926]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-12006]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 165
RIN 3038-AF74
Whistleblower Award Determination
AGENCY: Commodity Futures Trading Commission.
ACTION: Proposed rule.
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SUMMARY: The Commodity Futures Trading Commission (``Commission'' or
``CFTC'') is proposing for public comment to amend its rules
implementing a section of the Commodity Exchange Act (``CEA''). The
relevant section provides, among other things, that the Commission
shall pay an award--under regulations prescribed by the Commission and
subject to certain limitations--to eligible whistleblowers who
voluntarily provide the Commission with original information about a
violation of the CEA, or regulations thereunder, that leads to the
successful enforcement of a covered judicial or administrative action,
or a related action. The Commission expects the proposed substantive
amendment, which is modeled on a similar provision in the Securities
and Exchange Commission's (``SEC's'') regulations, to increase the
efficiency, transparency, and predictability of whistleblower claims
processing, thereby protecting and enhancing the program's
effectiveness in incentivizing whistleblowers to report. The Commission
is also incorporating technical corrections to the whistleblower rules
to update regulatory references to reflect the Whistleblower Office's
(``WBO's'') move in 2025, consistent with its adjudicatory functions,
to the Office of the General Counsel.
DATES: Comments must be received by July 15, 2026.
ADDRESSES: You may submit comments, specifically referencing
``Whistleblower Award Determination,'' and RIN 3038-AF74, by any of the
following methods:
<bullet> <a href="http://Regulations.gov">Regulations.gov</a>: Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and
press the ``Search'' button, then proceed as follows:
1. Under Refine Documents Results--check the box to ``Only show
documents open for comment'';
2. Under Agency--select ``See More'' and check the box for
``Commodity Futures Trading Commission,'' then press the Apply button;
3. Identify this proposal in the list of CFTC documents open for
comment, press the ``Comment'' button to open the submission form, and
follow the instructions on the form.
Alternatively, if you are viewing this proposal on
<a href="http://www.federalregister.gov">www.federalregister.gov</a>, click the ``Submit A Public Comment'' button
at the top of the page to open the comment form. Follow the
instructions on the form to submit your comment to <a href="http://Regulations.gov">Regulations.gov</a>.
<bullet> Mail: Send to--Christopher Kirkpatrick, Secretary of the
Commission, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW, Washington, DC 20581.
<bullet> Hand Delivery/Courier: Address to--CFTC Comment
Submission, Attn: Christopher Kirkpatrick, Secretary of the Commission,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street NW, Washington, DC 20581.
Please submit your comments using only one of these methods. To
avoid possible delays with mail or in-person deliveries, submissions
through <a href="http://Regulations.gov">Regulations.gov</a> are encouraged.
All comments must be submitted in English, or if not, accompanied
by an English translation. Do not include in your comment text or
attachments any personal identifying information or business
information that you do not want published online. Comments (regardless
of submission method) will be published without review for, and without
removal of, any personal identifying information or information your
business may consider confidential.
If you wish to submit confidential information for the Commission's
consideration, please contact the CFTC personnel listed in this
document under FOR FURTHER INFORMATION CONTACT before making any
submission. Please also carefully review the Commission's procedures in
17 CFR 145.9 for requesting confidential treatment under the Freedom of
Information Act (``FOIA'') of information submitted to the Commission.
The CFTC reserves the right, but shall have no obligation, to
review, pre-screen, filter, or redact all or any part of your comment
submission. The CFTC also reserves the right, without further
notification, to refuse to publish or to remove from public view all or
any part of your submission to the extent it contains content
inappropriate for publication in a comment file, such as--without
limitation--obscene language, threats of violence, solicitations for
commercial sales or illegal activity, or obvious spam. If a submission
that is refused for or withdrawn from publication because of
inappropriate content also contains comments on the merits of this
proposal, such submission will be retained in the record for the matter
and will be considered as required under the Administrative Procedure
Act (``APA'') and other applicable laws, and may be accessible under
the FOIA.
Pursuant to the APA, 5 U.S.C. 553(b)(4), a plain language summary
of the proposed rule is available at <a href="http://Regulations.gov">Regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Stephen Andrews, Deputy General
Counsel for Regulation, Office of the General Counsel, 202-308-7563,
<a href="/cdn-cgi/l/email-protection#e89a9d848d85898381868fa88b8e9c8bc68f879e"><span class="__cf_email__" data-cfemail="97e5e2fbf2faf6fcfef9f0d7f4f1e3f4b9f0f8e1">[email protected]</span></a>; Raagnee Beri, Director, Whistleblower Office, 202-
418-5986, <a href="/cdn-cgi/l/email-protection#12607077607b52717466713c757d64"><span class="__cf_email__" data-cfemail="582a3a3d2a31183b3e2c3b763f372e">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Overview of the Proposed Amendments
III. Request for Comment
IV. Related Matters
A. Regulatory Flexibility Analysis
B. Paperwork Reduction Act
C. Cost-Benefit Considerations
D. Antitrust Considerations
E. Executive Orders 12866, 13563, and 14192
I. Background
The Commission's whistleblower program (``Program'') serves an
important role in upholding the fairness and integrity of the nation's
commodities markets. By providing a means to financially reward
individuals who come forward and provide original information about
illegal conduct to the Commission, the Program enhances the
Commission's enforcement effort, in turn deterring legal noncompliance.
The Program derives from section 23 of the CEA; part 165 of the
Commission's regulations (the ``regulations'') further defines its
framework.\1\ That framework provides for the payment of awards,
subject to certain limitations and conditions, to whistleblowers who
provide the Commission useful information. More specifically, to
qualify for an award, a whistleblower must voluntarily provide original
information about a violation of the CEA or the regulations that leads
to
[[Page 35915]]
a successful Commission enforcement action (judicial or administrative)
that results in monetary sanctions over $1 million (``Covered
Action''), or the successful enforcement of an action brought by
specified entities or organizations such as the Department of Justice
(``Related Action'').\2\ The aggregate award amount for all successful
claimants, which is paid from the CFTC Customer Protection Fund
(``CPF''),\3\ must be between 10 and 30 percent of the amount of
monetary sanctions collected in the Covered Action and/or a Related
Action.\4\ Throughout the process, whistleblowers who make a claim for
an award have a right to be represented by counsel.\5\
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\1\ 7 U.S.C. 26; 17 CFR part 165.
\2\ See 7 U.S.C. 26(a)(1), (5), (b)(1); 17 CFR 165.2(e)
(defining ``covered judicial or administrative action''); 165.2(m)
(defining ``related action''); 165.5 (requirements for consideration
of an award); 165.7 (procedures for award applications in Commission
actions and related actions); 165.11(a) (awards based on related
actions).
\3\ 7 U.S.C. 26(b)(2). The CPF is funded through certain
monetary sanctions that the Commission collects and can receive
deposits or credits when the balance is at or below $100 million. 7
U.S.C. 26(g)(3)(A). In contrast, the SEC Investor Protection Fund--
the counterpart to the CPF for funding SEC whistleblower awards--has
a higher $300 million threshold. 15 U.S.C. 780-6(g)(a)(3)(A)(i). If
amounts deposited or credited to the CPF are insufficient to pay a
whistleblower award, additional collected monetary sanctions equal
to the unsatisfied portion of the award are to be deposited or
credited to the CPF. 7 U.S.C. 26(g)(3)(B). Besides funding
whistleblower awards, the CPF also funds the operation of the WBO
and the Office of Customer Education and Outreach. See id. at
(g)(2); U.S. Commodity Futures Trading Commission--Availability of
the Customer Protection Fund, B-321788 (GAO Aug. 8, 2011).
\4\ 7 U.S.C. 26(b); 17 CFR 165.8 (amount of award).
\5\ 7 U.S.C. 26(d)(1).
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The Commission has discretion regarding the amount it awards to a
whistleblower.\6\ In exercising this discretion, it must consider
certain statutorily specified factors, but it may not consider the CPF
balance.\7\ Rule 165.9(b) and (c) reiterates and elaborates on the
factors the Commission considers in determining whether to increase or
decrease a whistleblower award amount.\8\ Positive factors include: the
significance of the information provided by the whistleblower, the
degree of assistance provided by the whistleblower, furtherance of the
Commission's law enforcement interest, and the whistleblower's
participation in internal compliance systems.\9\ Negative factors
include whistleblower culpability, unreasonable reporting delay, and
interference with internal compliance and reporting systems.\10\ In
promulgating rule 165.9, the Commission expressed its intent that
whistleblower award amounts be determined based on an individualized
review of the circumstances surrounding each award.\11\
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\6\ 7 U.S.C. 26(c)(1)(A); 17 CFR 165.9.
\7\ 7 U.S.C. 26(c)(1)(B)(i)(I)-(III) (specifying the following
for consideration: information's significance; degree of the
assistance; programmatic interest; and enhanced ability to enforce
the CEA, protect customers, and encourage the submission of high-
quality information); and potential adverse incentives from oversize
awards; id. 26(c)(1)(B)(ii) (prohibiting consideration of the CPF
balance); see also id. 26(c)(1)(B)(i)(IV) (authorizing the
Commission to consider other factors established by rule or
regulation); 17 CFR 165.9(a)(5) (prescribing ``potential adverse
incentives from oversize awards'' as an additional factor for
consideration.
\8\ 17 CFR 165.9(b), (c).
\9\ Id. at 165.9(b). The rule specifies subfactors that the
Commission may consider is assessing each positive factor.
\10\ Id. at 165.9(c). The rule specifies subfactors that the
Commission may consider is assessing each negative factor.
\11\ See Whistleblower Incentives and Protection, 76 FR 53172,
53188 (Aug. 25, 2011) (``The Commission anticipates that the
determination of award amounts . . . will involve highly
individualized review of the circumstances surrounding each
award.'').
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Part 165 also sets out the process by which Program awards are
made, with the WBO serving as administrator. Among other duties,\12\
the WBO processes whistleblower claims and prepares packages with
detailed legal analyses and award/denial recommendations. In doing so,
the WBO reviews the circumstances surrounding each claim and award
individually (at times necessitating requests for additional relevant
information from claimants and outreach to Division of Enforcement
staff or, if a Related Action, staff of the other agency \13\). If a
claimant appears eligible for an award, the analysis will consider and
address each of the factors set out in CEA section 23(c) and rule
165.9. The Claims Review Staff (``CRS'')--three to five individuals
from various Commission divisions and offices--issues a preliminary
determination (``Preliminary Determination'') based on the WBO`s
analysis and recommendations. A Preliminary Determination reflects the
CRS's assessment of whether a claim should be granted, and, if so, the
proposed percentage amount of award.\14\ Upon receipt of a copy of the
Preliminary Determination, a claimant may contest it by submitting a
written response to the WBO.\15\ The CRS considers timely-submitted
responses before making a proposed final determination (``Proposed
Final Determination''). The WBO will notify the Commission of each
Proposed Final Determination, and, within 30 calendar days, any
Commissioner may request that the Proposed Final Determination be
reviewed by the Commission.\16\ The Proposed Final Determination
automatically becomes a final order of the Commission (``Final Order'')
if no commissioner requests review by the full Commission. If a
commissioner does request a review, the Commission will review the
record relied upon by staff in making its determinations, and issue its
Final Order.\17\ The Office of General Counsel reviews all Preliminary
Determinations and Proposed Final Determinations for legal sufficiency
before their issuance.\18\
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\12\ See 17 CFR 165.7(e)(1), (2), (f)(2), (g), (j) (specifying
various WBO duties).
\13\ Id. 165.7(f)(2).
\14\ See id. 165.7(g)(1), (i); id. 165.15(a)(2).
\15\ Id. 165. 7(g)(2). A claimant's failure to submit a timely
response to the Preliminary Determination results in the Preliminary
Determination becoming either the Final Order of the Commission or,
if an award was recommended, a Proposed Final Determination. Id.
165.7(h).
\16\ Id. 165.7(j).
\17\ Id. 165.7(i), (j).
\18\ Id. 165.7(k).
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By many metrics, the Program has been a success since it began
operating in 2011. The awards that the Commission paid through the end
of calendar year 2025 reflect that whistleblower-provided information
has contributed to successful enforcement actions resulting in over
$3.3 billion in financial remedies; \19\ ill-gotten gains earmarked for
return to victims account for approximately $160 million (excluding
added interest) of this amount. In fiscal year (``FY'') 2024, about 42
percent of the Commission's enforcement actions involved
whistleblowers. Between 2014, when the Commission issued its first
whistleblower award, and the end of calendar year 2025, the Commission
granted 73 awards in 56 matters, totaling over $395 million in award
payments. As a Director of Enforcement at the time noted, ``[t]imely
reports to the CFTC are critical for enforcement [as they] help prevent
further harm to customers or market participants and hold wrongdoers
accountable to the fullest extent possible.'' \20\
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\19\ This figure reflects awards in Commission enforcement
actions and Related Actions as defined in 7 U.S.C. 26(a)(5) and 17
CFR 165.2(m).
\20\ Press Release, CFTC, CFTC Awards $4M to Two Whistleblowers
(Nov. 12, 2024), available at <a href="https://www.cftc.gov/PressRoom/PressReleases/9006-24">https://www.cftc.gov/PressRoom/PressReleases/9006-24</a>.
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Notwithstanding the Program's success, however, an important area
for improvement exists--the time required to process and award
meritorious claims. Since 2012, the average time from the deadline for
prospective whistleblowers to submit award claims to the date of the
Commission's Final Order granting the award to meritorious claimants is
over two-and-one-half years. The length of the lag between claim
submission and award is a
[[Page 35916]]
concern for Program participants--as well as the Commission and
legislators--and could dampen incentives for potential whistleblower to
participate in the Program in the future.\21\ The proposed amendment is
intended to address the whistleblower claim processing delays as well
as improve process transparency--improvements designed to safeguard and
enhance the Program's continued success by reinforcing whistleblowers'
incentives to participate in it.
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\21\ See, e.g., Testimony of Michael Selig, Chairman of the
CFTC, before House Agriculture Committee (April 14, 2026) (remarks
of Congressman Zach Nunn) available at, <a href="https://www.pbs.org/newshour/politics/watch-live-cftc-chairman-testifies-before-house-panel-amid-scrutiny-of-prediction-markets">https://www.pbs.org/newshour/politics/watch-live-cftc-chairman-testifies-before-house-panel-amid-scrutiny-of-prediction-markets</a>, 3:16:28 mark);
Whistleblower Program Improvements Act, S. 2529, 116th Cong. sec.
3(a)(1)(3)(A) (2019-2020) (specifying a general one-year deadline
for CFTC whistleblower claim dispositions).
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Currently, precise award percentages are determined through a
process that is indifferent to the size of the claim, requiring
essentially the same degree of Commission staff time and attention to
determine award percentage levels with exactitude for both large and
smaller awards. Under part 165 currently, Commission staff needs to
analyze the factors that may increase the amount of a whistleblower's
award regardless of the size of an award.\22\ At times, this analysis
and review by WBO and other Commission staff triggers discussions about
what award the Commission should grant in the 10-30 percent statutory
range. These discussions can occur even when the maximum 30 percent
award yields a relatively small payout.\23\ And when they occur, they
can delay whistleblower award payments and consume resources that
otherwise could be devoted to resolving larger, more complex matters.
Additionally, when a Preliminary Determination is issued that
recommends an award of less than the maximum 30 percent in a matter
with a single claimant, that claimant may contest it in an effort to
receive a higher award percentage--an option that may appear attractive
depending on the award amount perceived to be at stake.\24\ Addressing
such contestations, or reconsideration requests, consumes additional
Commission time and resources.
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\22\ See 17 CFR 165.9(b).
\23\ See 7 U.S.C. 26(c)(1)(A), 17 CFR 165.9.
\24\ See 17 CFR 165.7(g)(2).
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The Commission expects the proposed rule changes to shorten the
time needed to resolve and pay on small meritorious whistleblower
claims by limiting the scope of analysis over (and the need for
extended intra-agency discussion about) the appropriate award
percentage, as well as reconsideration requests. The resource savings
for matters with small awards would, in turn, free Commission staff to
concentrate more on larger awards, facilitating the Commission's
ability to assess and pay larger awards more quickly. And, as explained
below, the Commission expects a shortened award timeframe and more
transparent, predictable process to reinforce whistleblowers'
incentives to participate in the Program as well.\25\
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\25\ To the extent delay may soften whistleblower incentives to
come forward, reducing it should help counter this tendency.
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II. Overview of the Proposed Amendments
The Commission proposes to amend part 165 of its regulations to
increase the Program's overall efficiency, transparency, and
predictability, thereby helping to preserve--and potentially enhance--
whistleblowers' incentives to report unlawful conduct. Specifically, it
proposes to add new rule 165.9(d) as described below and to redesignate
existing Sec. 165.9(d) as Sec. 165.9(e). Proposed new rule 165.9(d)
is modeled on an existing provision in the SEC's whistleblower program
that includes a presumption for awarding meritorious whistleblower
claims not exceeding $5 million at the 30-percent level, the statutory
maximum.
Proposed new rule 165.9(d) provides that, subject to Commission
discretion and its analysis of relevant regulatory factors, where the
statutory maximum award of 30 percent of the monetary sanctions
collected would total $5 million or less for all actions involving the
whistleblower's original information, the award amount will be set
conditionally at the 30 percent statutory maximum (``30 Percent
Presumption'').\26\ The 30 Percent Presumption may be overridden if the
claimant's conduct fails to meet any of three conditions set out in
proposed new rule 165.9(d)(1)(ii)-(iv). Specifically, it would not
apply if: (1) the claimant was culpable or involved in the violation,
or interfered with internal compliance or reporting system or the claim
triggers rule 165.17 (concerning awards to whistleblowers who engage in
culpable conduct); (2) the claimant engaged in unreasonable reporting
delay under rule 165.9(c)(1); \27\ or, (3) if in the Commission's
discretion 30 percent would be either inappropriate because the
claimant's assistance was limited or inconsistent with public
interests. If there are multiple claimants who qualify for an award
within the $5 million monetary-damages threshold and at least one's
application meets the conditions of proposed new rule 165.9(d)(1)(ii)-
(iv), the aggregate award will be set at the maximum 30 percent level.
If not every meritorious claimant satisfies the conditions in proposed
new rule 165.9(d)(1)(ii) and (iii), the Commission will allocate more
of the 30 percent award to the meritorious claimant(s) who do(es)
satisfy them.
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\26\ See proposed new Sec. 165.9(d)(1), (2). A $5 million
threshold for a 30% award corresponds to approximately $16.66
million in collected monetary sanctions. Collections would fall
under $16.66 million if the total monetary sanctions imposed are
less than this amount. Even if monetary sanctions exceed this
amount, Division of Enforcement staff who worked on an action may
have learned enough about the assets of the responsible parties to
reasonably anticipate that less than $16.66 million will ever be
collected. If so, this fact would appear in the record supporting
the Proposed Final Determination and enable the Commission to
``determine[ ] that it does not reasonably anticipate that future
collections would cause the statutory maximum award to be paid to
any whistleblower to exceed $5 million in the aggregate'' under
proposed new rule 165.9(d)(1)(i).
\27\ This exclusion may be waived at the Commission's discretion
based upon the claimant demonstrating that, in the circumstances,
doing so is consistent with the public interest and the Program's
objectives.
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The Commission views this proposed amendment as warranted and
appropriate for several reasons.
First, it expects that proposed new rule 165.9(d) will materially
reduce the time for award determinations by improving the Commission
staff's efficiency in processing award applications, which in turn
should enable the Commission to process more claims than previously
over the same time period. The reasons for the Commission's expectation
are described below.
The SEC's experience under its similar rule. The SEC's experience
after it promulgated its rule 21F-6(c) to incorporate a similar 30
percent presumption is consistent with the Commission's expectation for
improved efficiency and shortened award times.\28\ A year after
promulgating rule 21F-6(c), which codifies a similar presumption to
that in proposed new rule 165.9(d), the SEC reported that the ``30%
presumption has had a significant impact on [its] whistleblower
program,'' ``allowed for increased consistency among awards and greater
transparency to claimants and their counsel,'' and ``assisted ... in
expediting the processing of award claims.'' \29\
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\28\ Whistleblower Program Rules, 85 FR 70898, 70911--70912
(Nov. 5, 2020) (promulgating, among other rules, SEC rule 21F-6(c),
codified at 17 CFR 240.21F-6).
\29\ Securities and Exchange Commission, 2021 Annual Report to
Congress Whistleblower Program, 18 (2021), available at <a href="https://www.sec.gov/reports?aId=edit-tid&year=All&field_article_sub_type_secart_value=Reports+and+Publications-AnnualReports&tid=59">https://www.sec.gov/reports?aId=edit-tid&year=All&field_article_sub_type_secart_value=Reports+and+Publications-AnnualReports&tid=59</a>.
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[[Page 35917]]
A significant portion of meritorious whistleblower claimants are
likely to fall within the 30 Percent Presumption. As discussed in more
detail in the Cost-Benefit Consideration, below,\30\ the Commission's
historical experience suggests that the 30 Percent Presumption is
likely to apply to a sizeable portion (i.e., around 82 percent) of
meritorious whistleblower claims. For those 30-Percent-Presumption
claims, the staff-intensive, frequently time-consuming process of
arriving at the precise percentage award level within the statutorily
prescribed 20-percentage-point range should be truncated because, as
described further below, the scope of necessary award-determination
analysis and policy discussion will be narrowed.
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\30\ Section IV.C., infra.
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Narrowed award-determination analysis and policy discussion for a
significant portion of meritorious whistleblower claims. Unlike
currently, the only rule 165.9(b) factor Commission staff will need to
consider for award determinations in claims within proposed new rule
165.9(d)'s $5 million threshold is whether the whistleblower's
assistance was more than ``limited.'' \31\ The staff will not need to
more finely assess the whistleblower's degree of assistance.\32\ Nor
will staff need to make recommendations relating to the significance of
the whistleblower's information, the Commission's law enforcement
interest, or the whistleblower's participation in internal compliance
systems.\33\ As a result, WBO staff will spend less time analyzing
reasons for increasing the whistleblower's award and engaging in policy
discussions over the appropriate amount of a whistleblower award within
the statutory range of 10 to 30 percent; the Office of General
Counsel's legal sufficiency review also will be simplified.\34\
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\31\ Proposed new rule 165.9(d)(1)(iii).
\32\ See 17 CFR 165.9(b)(2).
\33\ See 17 CFR 165.9(b)(1), (3), (4).
\34\ One reason for part 165 policy discussions over exact award
percentages is to better assure--as a matter of fairness and to
avoid resource-consuming Preliminary Determination contests--that
awards are finely honed to an exact percentage point consistent with
all prior awards. Because each matter has unique underlying
circumstances, staff views may differ over what exact percentage
point between 10 and 30 best reflects the desired consistency in a
particular case. By designating a 30 percent maximum award for all
matters within the $5 million threshold unless the 30 Percent
Presumption is overcome, proposed new rule 165.9(d) would limit the
scope for policy discussions about award levels--not only for
matters of $5 million or less that would fall within the
presumption, but for larger matters as well. For, with respect to
matters above the $5 million threshold, there is likely to be a
narrowed basis (assuming, as the Commission expects, that the 30
Percent Presumption will encompass a significant portion of
meritorious whistleblower claims) for claimants contesting awards
below 30 percent to argue that a sub-30 percentage level is
inconsistent with how staff or the Commission assessed and applied
the rule 165.9(b) and (c) factors in matters receiving higher award.
Stated another way, because operation of the 30 Percent Presumption
is likely to apply to a significant portion of meritorious
whistleblower claims that the Commission awards, the portion of 30
percent awards that are not a product of the 30 Percent
Presumption--i.e., those that claimants contesting awards below 30
percent presumably would need rely upon for comparison purposes--is
likely to be significantly smaller as well.
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A reduced portion of meritorious whistleblowers will have reason to
contest the Preliminary Determination award percentage and request
reconsideration. Application of the 30 Percent Presumption to the
portion of meritorious claims entitled to it should largely eliminate
the impetus for those claimants to contest the Preliminary
Determination award percentage and request reconsideration since the
award will already be set at the statutory cap.\35\ Any reconsideration
request requires additional staff time and resources to consider the
issues and grounds advanced in the claimant's response (along with any
supporting documentation the claimant provided),\36\ analysis of all
the rule 165.9(b) positive factors, and invites policy discussions
about the appropriate award percentage. Avoiding the potential for them
in the portion of claims benefiting from the 30 Percent Presumption
should speed award times in that (a) claimants that are direct
beneficiaries of the presumption can be awarded without additional time
and/or resource expenditure and (b) Commission staff resources that
otherwise would be needed to handle the avoided reconsiderations will
be freed to more expeditiously process awards in other matters.
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\35\ Analysis of the distribution of past awards indicates that,
had proposed new rule 165.9(d) been in effect, approximately 30
percent of the matters with awards of $5 million or less would
likely have resulted in higher award payments. Assuming this 30
percent of the award population would have qualified for operation
of the 30 Percent Presumption, they would have had no reason to
contest the award; in actuality, a portion of them did.
\36\ See 17 CFR 165.7(i).
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Streamlining the award process for 30-Percent-Presumption claimants
will free resources to process and issue awards in larger matters in a
shortened timeframe. By reducing the staff time and resources to
process and issue awards in the significant portion of meritorious
claims that the Commission expects to qualify for the 30 Percent
Presumption, more resources can be devoted to other whistleblower
matters. This includes assessing and awarding claims in larger matters.
With the benefit of more focused staff attention, the Commission
expects accelerated processing of these other matters as well.
The Commission's second reason for considering proposed new
165.9(d) warranted and appropriate is that it anticipates that the
amendment will help guard against erosion of whistleblowers' incentives
to report violations to the Commission. As discussed in the Cost-
Benefit Consideration section and reflecting the time value of money,
extended delays in granting awards following a whistleblower's claim
submission diminish the overall value of the award.\37\ This reduction
may adversely affect the incentive for individuals to report illegal
activity. Consequently, significant delays may lead prospective
whistleblowers to determine that the reduced valuation resulting from
longer wait times does not justify the associated risks of disclosure.
To the extent that the 30 Percent Presumption reduces award application
processing times as the Commission expects, potential whistleblowers
will be more likely to find it worth the time and effort to report a
violation and apply for an award.
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\37\ See Section IV.C., infra.
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Third, by designing proposed new rule 165.9(d) to enhance Program
transparency, and predictability about the likely percentage applicable
to claims for matters within the $5 million award threshold, the
Commission seeks to enhance the incentives for whistleblowers to report
violations to the Commission. The factors considered in determining
award amounts are publicly available on the Commission's whistleblower
website, making them easily accessible to potential whistleblowers and
their counsel.\38\ With visibility to understand upfront that the 30
Percent Presumption will apply to a meritorious application for an
award at or below the $5 million cap--whistleblowers have reason to
view the
[[Page 35918]]
Program as more predictable and less burdensome. This, in turn, may
increase their willingness to participate. Analysis of the distribution
of past awards further supports proposed new rule 165.9(d)'s potential
to encourage whistleblower participation. That analysis indicates that,
had proposed new rule 165.9(d) been in effect, approximately 30 percent
of the matters with awards of $5 million or less would likely have
resulted in higher award payments, while in some of the other matters
that yielded 30 percent awards, the 30 Percent Presumption would have
reduced the amount of review by Commission staff needed to arrive at
those awards.
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\38\ See Commodity Futures Trading Commission Whistleblower
Program, Preliminary Decisions, <a href="https://www.whistleblower.gov/overview/preliminarydeterminations">https://www.whistleblower.gov/overview/preliminarydeterminations</a> (FAQs: ``What factors does the
CFTC consider in determining the amount of the award''). See also 7
U.S.C. 26(d) (delineating whistleblowers' right to be represented by
counsel). Because attorneys--who may submit tips and other
information to the Program for their anonymous clients (see id.
26(d)(2))--frequently represent whistleblowers on a contingency
basis, the Program's process and award-size potential affects
attorneys' incentives as well as whistleblowers'.
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Fourth, proposed new rule 165.9(d) is purposefully tailored to
improve Program efficiency, transparency, and predictability without
sacrificing Program integrity or public interests. This tailoring is
achieved in two ways: (1) conditioning operation of the 30 Percent
Presumption on satisfaction of the specific safeguarding criteria
articulated in paragraphs (d)(1)(ii)-(iii) and (2) the Commission's
explicit retained discretion in paragraphs (d)(1)(iii) and (iv). With
respect to the first, the Commission considers it inappropriate to
extend the benefit of the presumption to claimants who had any
culpability or involvement in the violation, who interfered to a degree
with internal compliance or reporting systems, or (absent justifying
case-specific circumstances) delayed reporting. Moreover, the delayed
reporting condition is designed to spur prompt reporting. With respect
to the second, the Commission's retained discretion is intended in
paragraph (d)(1)(iv)(A) to incentivize strong and sustained
whistleblower assistance in the Covered Action or Related Action and in
paragraph (d)(1)(iv)(B) to provide an overarching safeguard against the
30 Percent Presumption unintentionally operating to undermine the
public interest and/or Program integrity.\39\
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\39\ The Commission equates the meaning of the term ``public
interest'' in paragraphs (d)(1)(iii)'s and (iv)'s to the
considerations delineated in CEA section 15(a)(2), 7 U.S.C.
19(a)(2)--i.e., protection of market participants and the public;
efficiency, competitiveness, and financial integrity of markets;
price discovery; sound risk management practices; and other public
interest considerations.
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Finally, proposed new rule 165.9(d)--consistent with the spirit of
the Memorandum of Understanding between the CFTC and SEC to guide
inter-agency coordination and collaboration \40\--would better align
the CFTC's and the SEC's respective whistleblower programs. As noted
above, SEC rule 21F-6(c) currently articulates a conditional 30 percent
presumption mechanism for matters where collected monetary sanctions
are $5 million or less and was the model for proposed new rule
165.9(d).\41\ Because it is not unusual for affiliated market
participants or entities to be subject to regulation or oversight by
the CFTC as well as the SEC (and not inconceivable that financial-
sector illegal conduct could be sufficiently broad to implicate the
jurisdiction of both agencies), the Commission views consistency
between the two whistleblower programs' as appropriate.\42\ By modeling
proposed new rule 165.9(d) on the SEC's corresponding provision, the
Commission intends to guard against potential whistleblowers foregoing
participation in the Program because they perceive it as less
worthwhile compared to the SEC's whistleblower program.
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\40\ Memorandum of Understanding between the U.S. Securities and
Exchange Commission and the U.S. Commodity Futures Trading
Commission Regarding Harmonization in Areas of Common Regulatory
Interest (March 11, 2026).
\41\ Cf. Whistleblower Incentives and Protections, 91 FR 16328,
16339 (April 1, 2026) (Department of the Treasury, Financial Crimes
Enforcement Network NPRM) (proposing that 30 percent presumption
apply when 30 percent of aggregate monetary sanctions are $15
million or less).
\42\ This is particularly true since members of the legal bar
that represent whistleblowers, many of whom are knowledgeable about
both agencies' whistleblower programs, may be less likely to seek
potential whistleblower clients for, or represent whistleblowers in,
the CFTC's Program if they view it as less desirable than the SEC's.
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The Commission also considers the proposed part 165 amendment
preferable on cost-benefit grounds to the alternatives it assessed.
Namely, these alternatives were to: (1) hire more WBO staff to improve
the processing rate, (2) apply the 30 Percent Presumption in matters
where the award at the 30 percent maximum would be $2 million or less,
or (3) apply the 30 Percent Presumption in matters where the award at
the 30 percent maximum would be $15 million or less. Briefly, the
Commission considers the first option--i.e., hiring more WBO staff--
less desirable relative to the option of the WBO operating more
efficiently. With respect to the options of adjusting the award
threshold downward or upward, the Commission believes, based on its
assessment of past award determinations, that a level of $5 million or
less will be effective in serving the Program's needs while better
harmonizing the Commission's regulations with the SEC's. Section IV.C.
(``Consideration of Costs and Benefits''), below, expands on the
Commission's cost-benefit rationale for proposed new rule 165.9(d).
The Commission is also making technical corrections to its rules to
update references in part 165 to reflect the WBO's move in 2025 from
the Division of Enforcement to the Office of the General Counsel in
light of the WBO's adjudicatory functions.\43\ As a result of the WBO's
transfer, several references to the office's placement within the
Commission's operating structure in part 165 have become outdated.
Accordingly, the Commission is removing several references to the
Division of Enforcement and revising part 165 to reflect the office's
placement within the Office of the General Counsel.
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\43\ Keynote Address of Acting Chairman Caroline D. Pham, ISDA
Annual General Meeting (May 15, 2025).
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III. Request for Comment
The Commission generally requests comment on all aspects of the
proposed amendments and its analysis of them, including issues
identified and discussed in the ``Related Matters'' sections, IV.A.-E.,
below.\44\
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\44\ Section IV.C. (``Consideration of Costs and Benefits''),
incorporates additional specific requests for comment.
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IV. Related Matters
A. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612,
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. RFA section 603(a), 5 U.S.C. 603(a), requires
the Commission to undertake an initial regulatory flexibility analysis
of a proposed rule on small entities unless the Chairman certifies that
the rule, if adopted, would not have a significant economic impact on a
substantial number of small entities. 5 U.S.C. 605(b).
Only individuals are eligible for participation in the Commission's
whistleblower program. The proposed amendments would apply only to an
individual, or individuals acting jointly, who provide information
relating to the violation of the CEA or Commission regulations. By
definition, companies and other entities cannot be whistleblowers.\45\
Consequently, the persons that would be subject to the proposed rule
amendments are not ``small entities'' under the RFA.
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\45\ 7 U.S.C. 26(1)(7).
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Accordingly, the Chairman, on behalf of the Commission, hereby
certifies under 5 U.S.C. 605(b) that the proposed
[[Page 35919]]
rules would not have a significant economic impact on a substantial
number of small entities.
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
proposed amendments, if adopted, would not impose new recordkeeping or
information collection requirements that require approval by the Office
of Management and Budget under the PRA.
Accordingly, the requirements of the PRA do not apply to this
rulemaking.
C. Cost-Benefit Considerations
1. Introduction
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.\46\ 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 discussion below--framed
to conform to Executive Order 12866's directives for assessing costs
and benefits before promulgating a regulation--addresses the
Commission's statutory CEA section 15(a) obligation.\47\
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\46\ 7 U.S.C. 19(a).
\47\ Executive Order 12866 (as supplemented and amended) directs
executive agencies to regulate in a manner consistent with the
philosophy and principles articulated in it. Executive Order 12866,
58 FR 51735 (Oct. 4, 1993) (``Regulatory Planning and Review'') (as
amended by Executive Order 14215, 90 FR 10447 (Feb. 24, 2025)
(``Ensuring Accountability for All Agencies'') (``E.O. 14215'')
(sec. 3(a) of E.O. 14215 amends the definition of ``agency'' in E.O.
12866 sec. 3(b) to bring independent regulatory agencies within E.O.
12866's scope)); Executive Order 13563, 76 FR 3821 (Jan. 21, 2011)
(``Improving Regulation and Regulatory Review'') (``E.O. 13563'')
(supplementing and reaffirming E.O. 12866).
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As described above, the Commission is proposing to amend part 165
by adding proposed new rule 165.9(d) to improve the efficiency,
transparency, and predictability of processing whistleblower award
applications and align the Commission's approach with SEC rule 21F-
6(c).\48\ Under the current framework, every meritorious claim,
regardless of award size, undergoes an individualized, factor-by-factor
percentage review. This approach, designed to ensure tailored and fair
outcomes, has served the Program across matters of varying complexity.
For smaller-dollar matters, however, applying the same amount of
analysis can be disproportionately resource-intensive and extend
timelines for issuing final awards, which, in turn, potentially weakens
incentives for individuals to report violations. Reduced whistleblowing
activity, should it occur, could impair the Commission's ability to
enforce the CEA and its regulations effectively, diminish deterrence,
and ultimately hinder the Commission's broader mission of protecting
market participants and the public; supporting market efficiency,
competitiveness and market integrity; and ensuring sound price
discovery and risk management. For reasons discussed below, the
Commission sees proposed new rule 165.9(d) as the best option from a
cost-benefit standpoint.
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\48\ The proposed amendments would also redesignate current
Sec. 165.9(d) as new Sec. 165.9(e) and make technical corrections
in part 165 to update regulatory references to reflect the WBO's
2025 move, consistent with its adjudicatory functions, from the
Division of Enforcement to the Office of the General Counsel. These
amendments are ministerial and not expected to generate costs or
benefits.
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2. Baseline for Assessment
The Commission assesses the potential costs and benefits of the
amendments under consideration relative to the baseline of current
conditions. Specifically, these are the statutory and regulatory
conditions specified in existing CEA section 23 and part 165 of the
Commission's regulations and reflected in summary statistics that
describe the annual distribution of tips, applications and awards paid
by the Program under the existing rules; \49\ as well as present
operating conditions that affect whistleblower award timelines.\50\
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\49\ These summary statistics are available in Tables 1-3,
infra.
\50\ Under the current framework, rule 165.9 requires an
individualized, factor-by-factor review of award-percentage
considerations for claims of any size, contributing to processing
queues (backlog) in lower-dollar matters.
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Section 23 of the CEA directs the Commission to pay awards, in an
amount ranging from 10 to 30 percent of collected monetary sanctions,
to eligible whistleblowers who voluntarily provide original information
leading to a successful Covered Action or Related Action. The
Commission's implementing regulations reside in part 165, including
rule 165.9, which sets out the criteria and procedures for determining
award amounts. Under the current rules, claims of all sizes are subject
to the same individualized, multi-factor evaluation based on the
regulatory criteria addressing significance of information, degree of
assistance provided, programmatic considerations, and negative factors
such as culpability, unreasonable delay, or interference with internal
compliance systems. In short, it is a regulatory structure that
includes detailed review procedures uncalibrated to the economic impact
of individual cases. Historically, the average interval from claim-
submission deadline to final award order has been over two-and-one-half
years.\51\
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\51\ Multi-claimant matters and those in which Preliminary
Determinations are contested are likely to exceed this average.
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Tables 1-3, below, show Program baseline performance metrics. They
are labeled as follows to provide common references for the metrics
presented: ``awards'' refers to award payments issued to individual
awardees; ``orders granting awards'' refers to Commission actions
issuing formal decisions that confer awards in specific enforcement
matters where a single order may cover multiple awardees; ``percent of
total award dollars'' refers to percentage calculated against aggregate
dollars paid in whistleblower awards during the stated period. Table 1
presents the distribution of the number of whistleblower tips (received
via Form TCR \52\), award applications (received via Form WB-APP \53\),
awards, and orders granting awards from fiscal year 2012 through the
first quarter of fiscal year 2026.\54\ Table 2 presents the
distribution of whistleblower awards received by each awardee across
award size buckets during the same time period. Table 3 presents the
distribution of orders granting whistleblower awards (a given order
might have multiple awardees) across award size buckets during the same
period.
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\52\ See 17 CFR 165.3(a) (prescribing that whistleblowers submit
original information via a Form TCR to be eligible for award); id.
part 165 App. B (Form TCR and Form WP-APP).
\53\ See id. 165.7(b) (prescribing that whistleblowers submit a
Form WB-APP to file a claim to receive a whistleblower award); id.
part 165 App. B (Form TCR and Form WP-APP).
\54\ That is, through December 3, 2025.
[[Page 35920]]
Table 1--Distribution of the Number of Whistleblower Tips, Award Applications, Awards, and Orders Granting
Awards FY 2012-Q1, FY 2026
[Ending December 31, 2025]
----------------------------------------------------------------------------------------------------------------
Orders granting
FY Forms TCR Forms WB-APP Awards awards
----------------------------------------------------------------------------------------------------------------
2012......................................... 58 16 0 0
2013......................................... 138 12 0 0
2014......................................... 227 38 1 1
2015......................................... 232 47 1 1
2016......................................... 273 59 2 2
2017......................................... 465 74 0 0
2018......................................... 760 120 5 5
2019......................................... 455 117 5 5
2020......................................... 1,030 140 16 11
2021......................................... 961 140 6 6
2022......................................... 1,506 152 10 5
2023......................................... 1,530 301 7 5
2024......................................... 1,744 317 15 12
2025......................................... 1,697 203 3 2
2026 Q1...................................... 360 18 2 1
----------------------------------------------------------------------------------------------------------------
Table 2--Distribution of Whistleblower Awards Received by Each Awardee Across Award Size Buckets
[Through December 31, 2025]
----------------------------------------------------------------------------------------------------------------
Total award count Total award
Range Number of awards (%) dollars * (%)
----------------------------------------------------------------------------------------------------------------
$2M and below.......................................... 52 71 4
$2M+ to $5M............................................ 8 11 6
$5M+ to $10M........................................... 6 8 12
$10M+ to $15M.......................................... 3 4 10
$15M+ to $25M.......................................... 2 3 11
$25M and above......................................... 2 3 56
--------------------------------------------------------
Total.............................................. 73 100 100
----------------------------------------------------------------------------------------------------------------
* Figures do not sum to 100% due to rounding.
Table 3--Distribution of Orders Granting Whistleblower Awards Across Award Size Buckets
[Through December 31, 2025]
----------------------------------------------------------------------------------------------------------------
Total order count Total award
Range Number of orders * (%) dollars * (%)
----------------------------------------------------------------------------------------------------------------
$2M and below.......................................... 34 61 3
$2M+ to $5M............................................ 9 16 7
$5M+ to $10M........................................... 6 11 12
$10M+ to $15M.......................................... 3 5 10
$15M+ to $25M.......................................... 2 4 11
$25M and above......................................... 2 4 56
--------------------------------------------------------
Total.............................................. 56 100 100
----------------------------------------------------------------------------------------------------------------
* Figures do not sum to 100% due to rounding.
Based on awards the Commission issued through calendar year 2025,
whistleblower submissions have contributed to legal judgments calling
for more than $3.3 billion in financial remedies and the return of
approximately $160 million to harmed customers. From 2014, the year of
the Commission's first whistleblower award, through calendar year 2025,
the Commission granted 73 awards across 56 orders, amounting to more
than $395 million. In fiscal year 2024, whistleblowers were involved in
approximately 42 percent of the Commission's enforcement actions.\55\
These figures demonstrate that the program is firmly established,
widely used, and integral to the Commission's enforcement objectives.
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\55\ See Commodity Futures Trading Commission Whistleblower
Program, Customer Education Initiatives 2024 Annual Report, 8 (Oct.
2024), available at <a href="https://www.whistleblower.gov/sites/whistleblower/files/2024-11/FY24%20Customer%20Protection%20Fund%20Annual%20Report%20to%20Congress.pdf">https://www.whistleblower.gov/sites/whistleblower/files/2024-11/FY24%20Customer%20Protection%20Fund%20Annual%20Report%20to%20Congress.pdf</a>.
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The distribution of the whistleblower awards across award size
buckets further shows that the distribution of awards is highly skewed
towards lower dollar amounts, with the majority of awards falling below
$5 million. Approximately 71 percent of awards were at or under $2
million, collectively representing about four percent of total award
dollars paid to whistleblowers. When measured by the Commission's
[[Page 35921]]
formal orders granting awards, about 61 percent of these orders were
for $2 million or less, making up roughly three percent of total
payouts. Approximately 82 percent of awards were at or under $5 million
and collectively represented about 10 percent of total award dollars
paid to whistleblowers. Similarly, 77 percent of orders granting awards
were for $5 million or less, accounting for about 10 percent of total
payouts.\56\ Conversely, a small number of large awards, primarily
those exceeding $15 million, account for the largest share of total
award payments.
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\56\ The Commission has continued to resolve Covered Actions for
which the imposed monetary sanctions are small enough that a 30
percent award would not exceed $5 million.
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In fiscal year 2025, the Program received 203 award applications
and 1,697 tips. As part 165 requires a fully individualized assessment
for every claim and award amount, including those with low-value
sanctions, the staff review process is labor-intensive and time-
consuming, resulting in extended wait-times for award applicants. The
longer the interval between the claim deadline and claim-award
resolution, the greater the reduction of an expected award's present
value, which may diminish the economic incentives for individuals to
report potential violations. Challenges to Preliminary Determinations,
particularly in small cases, can impose additional wait-times for award
applicants. Significant amounts of staff time devoted to reviewing
challenges in low-value cases, divert efforts that otherwise would be
expended towards processing other claims, potentially ones with greater
impact or significance. As a result, resources spent on smaller matters
may delay the resolution of other cases, ultimately extending overall
award processing times and reducing the Program's effectiveness.\57\
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\57\ See 17 CFR 165.7(g)(2) (process for claimants to contest
preliminary award); id. 165.13(a) (claimants' right to appeal final
Commission order). Unlike the amount of an SEC whistleblower award,
the amount of a CFTC whistleblower award is subject to judicial
challenge. Cf. 15 U.S.C. 78u-6(f) with 7 U.S.C. 26(f)(2).
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The absence of any streamlined mechanism for small claims contrasts
with the SEC's whistleblower program, which, as amended in 2020,
includes a presumption for awarding qualifying claimants in matters
involving total awards of $5 million or less at the statutory 30
percent maximum.\58\ Given the potential overlap between commodities
and securities enforcement matters, divergence between the two federal
whistleblower programs has the potential to create uncertainty and
inconsistent incentives that could dissuade potential whistleblowers.
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\58\ Whistleblower Program Rules, 85 FR 70898, 70911-70912 (Nov.
5, 2020) (promulgating, among other rules, SEC rule 21F-6(c),
codified at 17 CFR 240.21F-6).
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3. Proposed New Rule 165.9(d) and Other Alternatives Considered
The Commission is proposing to amend rule 165.9 by adding proposed
new 165.9(d) to establish a presumption that the Commission will set
the award at 30 percent, the statutory maximum, in matters where the
total awards in the Covered Action and any Related Actions do not
exceed $5 million (the 30 Percent Presumption) unless certain negative
factors are present. That is, subject to meeting the conditions set out
in proposed new rule 165.9(d)(1)(ii)-(iii) and the Commission's
continued discretion to override the presumption for limited assistance
or public interest/Program objective concerns (see proposed new rule
165.9(d)(1)(iv)), the award amount will be set at the 30 percent
statutory maximum. Under the proposed rule, the presumption would be
unavailable if the claimant engaged in culpable conduct, unreasonably
delayed reporting, or interfered with an entity's internal compliance
system, or where the Commission deems application of the presumption
inappropriate due to limited assistance or conflicts with the public
interest or the objectives of the whistleblower program.
In addition, in cases where multiple whistleblowers qualify for an
award in a matter at or below the $5 million threshold, the Commission
would set the total, aggregate award at 30 percent and would allocate
the award among eligible claimants, taking into account the potential
that not all awardees may satisfy the conditions for the presumption in
proposed new rule 165.9(d)(1)(ii)-(iii). The Commission believes the
proposed amendments will increase transparency, predictability, and
efficiency in the adjudication of whistleblower claims and more closely
align the CFTC's whistleblower rules with the SEC's approach.
In determining to propose new rule 165.9(d), the Commission also
assessed its costs and benefits relative to three alternatives: (1)
hiring more WBO staff to address the existing backlog and improve
processing times, (2) applying the 30 Percent Presumption in matters
where the resulting award based on collected monetary sanctions would
be $2 million or less, or (3) applying the 30 Percent Presumption in
matters where such an award would total up to $15 million. The
assessment of various thresholds relies on historical Program data and
reflects observed patterns in claim volume, award size distribution,
and administrative resource demands.\59\ For 2014 through calendar year
2025, approximately 71 percent of awards fall in the $2 million-and-
below category, but those awards account for only about 4 percent of
total award dollars. Expanding the threshold to $5 million increases
the affected population substantially--to 82 percent of awards--while
still implicating only about 10 percent of total award dollars. By
contrast, extending the threshold to $15 million captures about 94
percent of awards, but increases the associated award dollars affected
to approximately 32 percent. Based on this comparison, the Commission
preliminarily believes that applying the 30 Percent Presumption to
matters with awards of up to $5 million would capture a large
proportion of whistleblowers while helping ensure that raising the
threshold does not significantly increase the total amount of awards
distributed, thereby balancing administrative efficiency with the
Program's incentive objectives. The Commission recognizes, however,
that significant structural changes continue to occur in the financial
markets within its jurisdiction, and that the number, nature, and
complexity of future enforcement matters--and related whistleblower
claims--cannot be predicted with precision. As a result, any estimate
of the net effects of the proposed amendment is subject to uncertainty
and cannot be expressed with a narrow confidence interval. Recognizing
this limitation, the Commission preliminarily believes, based on the
information presently available and subject to consideration of public
comments, that proposed new rule 165.9(d) represents the most effective
and appropriate option from a cost-benefit standpoint.
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\59\ See Tables 2 and 3, supra.
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4. Assessment of Proposed New Rule 165.9(d)'s Benefits
Relative to the baseline and subject to consideration of comments,
the Commission preliminarily believes that proposed new rule 165.9(d)
would improve the efficiency of whistleblower-award processing; reduce
the potential for some administrative and judicial contests; enhance
the predictability and procedural clarity of the award process for
prospective whistleblowers; strengthen incentives for timely and high-
quality reporting; support the effectiveness of the Program and the
Commission's enforcement mission; conserve CPF resources; and adopt an
[[Page 35922]]
approach consistent with the SEC's rule 21F-6(c).\60\
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\60\ The Commission is unaware of metrics to monetize these
benefits. Accordingly, they are discussed qualitatively and, to the
extent possible, quantitatively.
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Through operation of the 30 Percent Presumption, proposed new rule
165.9(d) is expected to reduce the time and resources required for the
WBO and the Commission to engage in the full factor-by-factor analysis
specified in rule 165.9(b) and (c) for smaller-dollar matters.
Specifically, when the presumption applies, staff would not conduct
granular analysis for three award-percentage factors--i.e., (1) the
significance of the whistleblower's information; (2) the degree of
assistance provided by the whistleblower (beyond confirming that
assistance was not limited); (3) the Commission's interest in deterring
violations; and (4) participation in internal compliance systems.\61\
Assessing all these factors can be labor intensive. For example,
evaluating ``degree of assistance'' may entail reviewing hundreds of
pages of investigative records and correspondence, while determining
``significance'' or ``deterrence'' involves cross-referencing
enforcement outcomes and market impacts. Based on historical data,
streamlining the award determination process for matters under the $5
million threshold should eliminate the need for individualized analysis
on these points for many awards, thereby substantially reducing
administrative burden. Accordingly, the Commission preliminarily
believes that removing these requirements is likely to result in
substantial improvements in award-processing efficiency, including
fewer disputes over award percentages when the maximum is awarded by
operation of the 30 Percent Presumption.\62\ The Commission further
notes that the SEC's experience with its analogous provision, SEC rule
21F-6(c), indicates that such a presumption can result in meaningful
improvements in award-processing efficiency.\63\
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\61\ Commission staff would continue to evaluate the negative
factors in rule 165.9(c) to determine whether the presumption
applies under proposed new rule 165.9(d).
\62\ A single-claimant award at the 30-percent level eliminates
any incentive for that claimant to contest the award percentage in
the Preliminary Determination or appeal the Final Determination.
\63\ According to the SEC's 2021 annual report to Congress,
after implementation of the Whistleblower Rule Amendments, the 30
percent presumption was applied in approximately 89 percent of cases
with award amounts not exceeding $5 million, compared to 46 percent
prior to the amendments. The report further notes that this
presumption has increased consistency, transparency, and expedited
the processing of award claims in FY 2021. Securities and Exchange
Commission, 2021 Annual Report to Congress Whistleblower Program, 18
(2021), available at <a href="https://www.sec.gov/reports?aId=edit-tid&year=All&field_article_sub_type_secart_value=Reports+and+Publications-AnnualReports&tid=59">https://www.sec.gov/reports?aId=edit-tid&year=All&field_article_sub_type_secart_value=Reports+and+Publications-AnnualReports&tid=59</a>.
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The Commission also preliminarily believes that the benefits of
improved processing efficiency are likely to increase over time as the
markets within the Commission's jurisdiction continue to evolve. As new
products, trading technologies, and market structures emerge, the
Commission expects, based on its experience, that the number and
complexity of potential enforcement matters will grow as well,
expanding the field for potential whistleblower assistance in the
process.\64\ Accordingly, the Commission preliminarily believes it is
reasonable to expect that streamlined review of smaller-dollar claims
will become increasingly important for maintaining Program
effectiveness.\65\
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\64\ For example, the Commission has observed significant recent
growth in event contracts--i.e., derivative contracts, typically
with a binary payoff structure, based on the outcome of an
underlying occurrence or event--and the prediction markets that
trade them. See Prediction Markets, 91 FR 12516, 12517 nn.9-10 and
accompanying text (March 16, 2026) (advanced notice of proposed
rulemaking). Insider trading in these expanding prediction markets
is a particular focus for the Commission's enforcement effort. See
David I. Miller, CFTC Director of Enforcement, Public Remarks and
New York University Law School--CFTC Enforcement Priorities, Insider
Trading in the Prediction Markets and Cooperation with the CFTC
(March 31, 2026), available at <a href="https://www.cftc.gov/PressRoom/SpeechesTestimony/opamiller1">https://www.cftc.gov/PressRoom/SpeechesTestimony/opamiller1</a>.
\65\ The Commission's analysis is grounded in historical Program
data, which, combined with the markets' highly dynamic natures,
renders it unable to more precisely quantify the likely magnitude of
expected efficiency gains ex ante.
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In addition, the Commission expects that proposed new rule165.9(d)
will reduce the potential for award-processing delays to discourage
future whistleblower reporting. Economic theory and common experience
suggest that shorter, more predictable timelines reinforce the
incentive to report promptly by increasing the perceived value of
prospective awards.\66\ By shortening processing timelines, proposed
new rule 165.9(d) should mitigate timing-related disincentives and help
preserve the Program's ability to attract high-quality information.
---------------------------------------------------------------------------
\66\ According to the economic theory, the longer the time
required to make an award, the lower the present value of the award
becomes to the claimant at the time of applying, reflecting the time
value of money. As a result, if the delay between application and
award becomes too long, a potential whistleblower, based on his or
her circumstances, may likely decide that the cost of becoming a
whistleblower would outweigh the present value of the whistleblower
award.
---------------------------------------------------------------------------
The Commission further anticipates that proposed new rule 165.9(d)
will improve the predictability and procedural transparency of the
award process for prospective whistleblowers. Clearer expectations
regarding the likely award percentage and anticipated processing time
may encourage timely reporting--particularly before any negative award
factors, such as unreasonable delay, could arise. Greater
predictability may also enhance prospective whistleblowers' ability to
evaluate the present value of potential awards, thereby reinforcing CEA
section 23's incentive structure.\67\
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\67\ Also, some meritorious whistleblowers may receive higher
awards than they would under the status quo. The Commission's
analysis of historical award data suggests that, of the 43 matters
with $5 million or less in awards, approximately 30 percent would
have a received a larger award had proposed new rule 165.9(d) been
in effect.
---------------------------------------------------------------------------
Proposed new rule 165.9(d) is also expected to support the
effectiveness of the Program and the Commission's broader deterrence
and enforcement mission, for which the Program is a market disciplining
mechanism. By introducing efficiencies without requiring additional
staffing, the proposed new rule would help conserve CPF resources for
expenditure on Program awards.\68\ Moreover, by strengthening
incentives for individuals to provide timely, high-quality information,
proposed new rule 165.9(d) also could conserve enforcement resources
that would otherwise be required to independently identify and
investigate misconduct.
---------------------------------------------------------------------------
\68\ See 7 U.S.C. 26(g)(2) (specifying use of fund); n.3, supra.
---------------------------------------------------------------------------
Finally, harmonizing the Commission's approach with SEC rule 21F-
6(c) should reduce interagency differences that otherwise may create
uncertainty among prospective whistleblowers operating in markets
subject to both agencies' jurisdiction. As noted above, one market
participant or entity may be subject to CFTC jurisdiction, while its
affiliate market participant or entity may be subject to SEC
jurisdiction. And, while the CFTC and SEC oversee different aspects of
financial-sector activity, it is not impossible that some broad-reach
illegal conduct could implicate the jurisdiction of both agencies,
meaning that a prospective whistleblower could conceivably have
information valuable to both agencies and/or be informed about both
agencies' whistleblower programs.\69\ Such harmonization is consistent
with existing coordination between the two agencies and may help ensure
that the CFTC's Program is
[[Page 35923]]
viewed as offering fair and comparable incentives, thereby encouraging
participation and improving the overall functioning of the federal
whistleblower framework.
---------------------------------------------------------------------------
\69\ Further, symmetry with SEC rule 21F-6(c)'s presumption
helps guard against the potential that members of the whistleblower
bar may be less inclined to represent clients in Program matters.
See n.42, supra, noting that the Program's process and award-size
potential affects attorneys' incentives as well as whistleblowers'.
---------------------------------------------------------------------------
5. Assessment of Proposed New Rule 165.9(d)'s Costs
Based on historical experience and subject to acknowledged
uncertainty about future market conditions and enforcement activity,
the Commission preliminarily believes that proposed new rule 165.9(d)
would not impose additional burdens on whistleblowers seeking to
provide tips or apply for awards; incorporates safeguards that mitigate
risks to the public interest; and would result in a limited and
manageable increase in award payments from the CPF. Using Program data
from 2014 through calendar year 2025, the Commission identified 43
matters with awards at or under $5 million that, had the 30 Percent
Presumption been operative for all 43, could have increased the
aggregate award payments from the CPF by as much as $4 million.\70\
Four million dollars corresponds to one percent of the approximately
$395 million paid in awards since 2014 and less than two percent of the
FY 2025 CPF balance, an effect that the Commission preliminarily views
as limited and manageable relative to the Program's scale and the CPF's
capacity.
---------------------------------------------------------------------------
\70\ As previously noted, a portion of these 43 awards were at
levels below 30 percent. See n.67, supra. The estimated $4 million
increase reflects the impact had all 43 awards been at the 30
percent level.
---------------------------------------------------------------------------
Relative to the baseline, the Commission does not anticipate that
proposed new rule 165.9(d) would impose material costs on
whistleblowers. The proposal does not change the information that
whistleblowers must provide to submit a tip or apply for an award, nor
does it alter the substantive eligibility requirements under part 165.
Accordingly, the Commission expects no incremental burden on potential
or existing whistleblowers. Likewise, the proposal introduces no new
reporting, recordkeeping, or compliance obligations for the WBO or the
Commission, and therefore, is not expected to increase administrative
operating costs. Since the proposal reduces, in many cases, the number
of positive factors Commission staff need to analyze to determine the
award percentage, the Commission preliminarily expects associated
processing costs to decline, thereby increasing program efficiency.
Also, the proposed amendment is tailored with conditions and
retained Commission discretion to ensure that the 30 Percent
Presumption does not result in outcomes contrary to the Commission's
interests. The presumption would be unavailable where negative factors
are present (including culpability, unreasonable delay, or interference
with internal compliance systems) and the Commission would retain the
ability to overcome the presumption if applying the maximum percentage
would be inappropriate in light of the public interest or the
objectives of the whistleblower program. These safeguards are intended
to avoid unintended costs associated with over-inclusive awards, i.e.,
awards at the statutory-maximum percentage notwithstanding that the
claimant's assistance was limited or duplicative; the presence of a
negative factor (culpability, unreasonable delay, or interference with
internal compliance systems); inconsistency with program objectives or
the public interest; or unduly awarding one claimant relative to
another in a multi-claimant award allocation. The unintended costs
could be realized, for example, in the form of diminished Program and/
or enforcement effectiveness resulting from dulled or distorted
whistleblower incentives to report violations swiftly and provide
fulsome whistleblower assistance.
With respect to the CPF,\71\ the Commission recognizes that
proposed new rule 165.9(d) could increase payments for the subset of
awards at or under the $5 million threshold compared to awards
calculated under existing part 165. Using Program data from 2014
through the end of calendar year 2025, the Commission identified 43
matters with $5 million or less in awards, representing approximately
10 percent of the total award dollars paid over that period. If the 30
Percent Presumption had applied to these 43 matters, the Commission's
analysis indicates that total CPF payouts would have increased by less
than $4 million during the entire period the Program has been operated
\72\ (i.e., less than $333,333 on an annualized basis over 12 years).
Four million dollars is approximately one percent of the more than $395
million in whistleblower awards issued since 2014 through calendar year
2025 and less than two percent of the CPF balance at the end of FY
2025.\73\ Based on this historical analysis, the Commission does not
view the potential increase in CPF withdrawals as threatening the CPF's
continued efficacy or its ability to support the Program's statutory
functions.\74\
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\71\ See n.3, supra.
\72\ See nn.67 and 70, supra.
\73\ See Commodity Futures Trading Commission Whistleblower
Program, Customer Education Initiatives 2025 Annual Report, 3, 21-21
(Feb. 2026) (includes CPF balance sheet showing available balance of
$212,679,118 as of September 30, 2025).
\74\ And, as noted previously, the Commission lacks discretion
to consider the CPF balance in its determination of award amount. 7
U.S.C. 26(c)(1)(B)(ii); 17 CFR 165.9(d). Further, the Commission
lacks discretion to not pay meritorious awards. See 7 U.S.C.
26(b)(1) (saying the Commission ``shall pay'' awards to qualifying
whistleblowers).
---------------------------------------------------------------------------
The Commission acknowledges that these estimates rely on the
Program's historical experience and that future effects are subject to
uncertainty. The derivatives markets overseen by the Commission are
experiencing significant structural evolution, including new products,
new intermediaries, and changing market dynamics and new trading
technologies, introducing uncertainty regarding the number, nature, and
size of future enforcement actions and related whistleblower claims.
Accordingly, ex ante estimates of the proposal's impact on the CPF
cannot be expressed with a narrow confidence interval. Recognizing this
limitation, the Commission preliminarily believes, based on currently
available data and the proposal's tailored safeguards and retained
Commission discretion, that any additional costs associated with
proposed new rule165.9(d) are likely to be limited and manageable.
6. Assessment of Alternatives
In developing proposed new rule165.9(d), the Commission considered
several alternatives and has preliminarily determined that none would
achieve the same combination of efficiency, incentive alignment, and
programmatic coherence as the proposed approach.
The Commission considered increasing WBO staffing to accelerate
processing. While additional staff may modestly improve processing
capacity in the near term, this alternative does not result in a
substantial increase in the number of cases reviewed compared to the
30-Percent-Presumption option in proposed new rule 165.9(d) nor does it
fundamentally address the procedural inefficiencies inherent in the
current framework. Furthermore, staffing increases are costlier to
implement. For example, the Commission estimates the annual salary
burden for hiring one data analyst at the CT-13 grade and two attorney-
advisors at the CT-14 grade would be $512,497 per year, not
[[Page 35924]]
including benefits.\75\ Funding additional staffing from the CPF would
require, therefore, a greater draw on resources, without a commensurate
improvement in award-processing efficiency. Because this option fails
to meaningfully address the underlying procedural inefficiency of the
current framework and carries ongoing costs to the CPF, the Commission
does not regard it as preferable to the proposed amendment.
---------------------------------------------------------------------------
\75\ The Commission estimates that increasing the capacity of
the Program by hiring one data analyst at the CT-13 salary grade and
two attorney-advisors at the CT-14 salary grade would result in an
aggregate minimum annual salary burden (excluding benefits) of
$512,497. This figure was calculated using the Commission's 2026 pay
table and the lowest wage specified in the CT-13 and CT-14 wage
bands for employees in Washington, DC, respectively.
---------------------------------------------------------------------------
The Commission also considered a lower presumption threshold of $2
million.\76\ Although a $2 million threshold would capture a
substantial number of smaller matters, it would forfeit the benefits
associated with harmonization with SEC rule 21F-6(c), including
reducing inter-agency disparities that could influence whistleblower
behavior in cross-jurisdictional contexts. A lower threshold, assessed
on the basis of the historical data, would also apply the presumption
to fewer matters,\77\ thereby diminishing potential gains in
timeliness, participation, and administrative efficiency without
significantly reducing the cost burden on the CPF.\78\ Given these
considerations, and recognizing that the CPF impact of a $5 million
threshold appears manageable based on historical data, the Commission
preliminarily believes that a $2 million threshold would not maximize
the programmatic and incentive-based benefits sought through this
rulemaking.
---------------------------------------------------------------------------
\76\ This is an approach initially proposed but ultimately not
adopted by the SEC. See Whistleblower Program Rules, 85 FR at 70910-
70911.
\77\ That is, 61 percent instead of 77 percent as measured by
past whistleblower awards. See Table 3, supra.
\78\ Id. (showing only a four percent difference in total award
dollars at the $2 million-capped level versus the $5 million-capped
level).
---------------------------------------------------------------------------
The Commission also evaluated whether the 30 Percent Presumption
should apply to matters with awards up to $15 million, consistent with
an approach proposed by another federal agency in a separate
whistleblower rulemaking.\79\ The vast majority of historical awards,
approximately 94 percent by count, fall within a $15 million threshold,
substantially more than within the $5 million threshold under proposed
new rule 165.9(d). Based on the historical Program data, such an
expansion would scope in roughly one-third of total award dollars
(approximately 32%), increasing potential CPF exposure. Additionally, a
$15 million threshold would diverge significantly from the SEC's
approach, reducing the harmonization benefits in cross-jurisdictional
contexts. For these reasons, the Commission preliminarily concludes
that a higher threshold would not offer a superior balance of costs and
benefits relative to the proposed $5 million level.
---------------------------------------------------------------------------
\79\ See Whistleblower Incentives and Protections, 91 FR 16328,
16339 (Financial Crimes Enforcement Network, Department of Treasury;
proposed 31 CFR 1010.930(e)(3)(iv)--Certain Awards of $15 Million or
Less).
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7. Consideration of CEA Section 15(a) Factors
Section 15(a)(2) of the CEA requires the Commission to consider the
costs and benefits of its actions in light of five factors: (1)
protection of market participants and the public; (2) efficiency,
competitiveness, and financial integrity of the futures and swaps
markets; (3) price discovery; (4) sound risk management practices; and
(5) any other public-interest considerations.\80\ The following
discussion synthesizes the Commission's consideration of these factors
with respect to proposed new rule165.9(d), based on the Program's
historical data and subject to recognized uncertainty regarding the
number, nature, and complexity of future whistleblower matters.
---------------------------------------------------------------------------
\80\ 7 U.S.C. 19(a)(2).
---------------------------------------------------------------------------
The Commission preliminarily believes that proposed new rule
165.9(d) is likely to enhance the protection of market participants and
the public by improving incentives for the timely, high-quality
reporting of potential violations through more predictable award-
percentage outcomes and streamlined processing for matters where the
statutory-maximum payout would be $5 million or less. Assessed using
historical Program data, approximately 82 percent of awards by count
were $5 million or less, indicating that more rapid award-percentage
determinations for smaller-dollar cases could improve timeliness across
a substantial share of meritorious claims. Under proposed new rule
165.9(d), when the presumption applies, granular assessment of
specified factors--e.g., significance; degree of assistance (beyond
confirming it was not limited); programmatic interest/deterrence;
certain negative factors--will be reduced; at the same time, legal
sufficiency checks, eligibility checks, and Commission discretion are
retained. Accordingly, the Commission sees this approach as consistent
with strengthened detection, deterrence, and remediation without
compromising safeguards. More timely and accurate reporting strengthens
the Commission's ability to detect, deter, and remediate violations
that could harm market participants, distort market integrity, or
undermine confidence in derivatives markets. Based on the historical
Program data--which shows that, had proposed new rule 165.9(d) been
operative since 2014, the aggregate total impact to the CPF would have
been less than $4 million \81\--the Commission preliminarily expects
proposed new rule 165.9(d)'s impact on the CPF to be limited,
manageable, and consistent with the Program's public-interest
objectives. In addition, the Commission preliminarily views the
alignment between proposed new rule 165.9(d) and the SEC rule 21F-6(c)
as likely to reduce cross-jurisdictional uncertainty for prospective
whistleblowers operating in markets subject to both agencies,
supporting more timely detection and remediation of misconduct. These
benefits may increase over time as the evolving structure of CFTC-
regulated markets gives rise to new forms of misconduct that
whistleblowers are uniquely positioned to identify.
---------------------------------------------------------------------------
\81\ This figure represents approximately one percent of total
awards paid since 2014 and less than two percent of the FY 2025 CPF
balance.
---------------------------------------------------------------------------
The Commission preliminarily expects proposed new rule165.9(d) to
promote efficiency by streamlining award-percentage determinations for
matters in which the statutory-maximum payout would be $5 million or
less, a cohort that accounts for approximately 82 percent of awards by
count in historical Program data. Improved Program processing
efficiency should feed enforcement program effectiveness, which in turn
supports market competitiveness and enhances overall market integrity
by increasing the likelihood that harmful conduct will be detected and
addressed. The Commission expects similar positive effects for its
enforcement program from the alignment of proposed new rule 165.9(d)
and SEC rule 21F-6(c). The rules' alignment is likely to reduce cross-
jurisdictional uncertainty for prospective whistleblowers--a feature
that could potentially improve the flow of whistleblower information to
support the Commission's enforcement program effectiveness in
furtherance of market competitiveness and financial integrity. Finally,
because proposed new rule 165.9(d) does not introduce new
[[Page 35925]]
reporting, recordkeeping, or compliance obligations, it is not expected
to impose new burdens on registrants or other market participants.
Although the proposed new rule 165.9(d) would not directly impact
price-formation mechanisms, the Commission preliminarily foresees an
indirect contribution to more accurate price discovery. Again, by
enhancing the Program's efficiency, transparency and predictability--
improvements likely to shorten award timelines and reinforce
whistleblower incentives to report--proposed new rule 165.9(d) would
operate in service of the Commission's enforcement mission to deter and
police misconduct. Misconduct that impairs market transparency,
distorts prices, or affects liquidity is more likely to be identified
and addressed when whistleblowers have reliable incentives and
predictable award outcomes. By enhancing the Commission's ability to
detect misconduct earlier and to deploy enforcement resources more
efficiently, the proposed amendment supports the statutory objective of
fostering fair, orderly, and transparent markets.
Market participants rely on the integrity of derivatives markets to
hedge and manage risk effectively. The Commission preliminarily
believes that to the extent proposed new rule165.9(d), for reasons
already identified, strengthens deterrence of misconduct and
accelerates the Commission's response to potential violations, it will
support sound risk-management practices indirectly by accelerating the
identification and remediation of misconduct that can create
operational, counterparty, or market-wide risks. By reinforcing the
incentive for whistleblowers to promptly report information that may
reveal systemic risks, operational failures, or abusive conduct, the
proposal enhances the Commission's ability to address emerging threats
to market integrity. These benefits may be particularly significant
given the ongoing evolution of the markets within the Commission's
jurisdiction and the accompanying uncertainty in predicting future
patterns of misconduct.
The Commission preliminarily believes the proposed new rule165.9(d)
is likely to advance several additional public-interest considerations.
First, the proposed new rule is expected to conserve public resources
by improving administrative efficiency with limited additional CPF
drawdown. Analysis of historical Program data indicates that total CPF
payouts would have increased by less than $4 million during the entire
period the Program has operated (i.e., less than $333,333 on an
annualized basis over 12 years). Four million dollars is approximately
one percent of the more than $395 million in whistleblower awards
issued since 2014 and less than two percent of the CPF balance at the
end of FY 2025.
Second, the Commission preliminarily believes that aligning the $5
million threshold with SEC rule 21F-6(c) fosters consistency across the
two whistleblower programs, which serves the public interest in
effective legal enforcement across financial markets. More
specifically, the more harmonized award framework should help ensure
that attorneys representing whistleblowers, many of whom submit tips
resulting in awards, are motivated and confident in advising and
prioritizing CFTC whistleblowers and their cases along with those of
SEC whistleblowers. This, in turn, helps prevent valuable whistleblower
information from being overlooked or not fully pursued through the
appropriate channels whether at the CFTC, SEC or both. Ultimately,
consistent legal enforcement across financial markets supports market
integrity, market participant protection and public trust in regulatory
systems.
8. Request for Comments
The Commission invites public comments on all aspects of its cost-
benefit consideration, including but not limited to the correctness of
the baseline against which costs and benefit are measured; the
correctness of its assessment of proposed new rule 165.9(d)'s costs and
benefits; the correctness of its assessment of the costs and benefits
of the three identified alternatives; and whether an alternative other
than those the Commission is proposing or considered would be more net
beneficial and/or better serve the considerations set out in CEA
section 15(a)(2) and why. Commenters are also requested to submit data
or other information to support any positions they assert as well as to
assist the Commission in monetizing, quantifying or qualifying the
costs and benefits of proposed new rule 165.9(d) and the alternatives
considered.
D. Antitrust Considerations
CEA section 15(b) 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. Subject to consideration of comments, the Commission foresees no
negative impact accruing to the public interests protected by the
antitrust laws from proposed new rule 165.9(d). Accordingly, in its
view proposed new rule 165.9(d) is consistent with the least anti-
competitive means of achieving the objectives of the CEA.
E. Executive Orders 12866, 13563, and 14192
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; and distributive
impacts). Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as any regulatory action that is likely to result
in a rule that may: (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, or the President's priorities.
The Office of Management and Budget has determined that this action
is not a significant regulatory action as defined in Executive Order
12866, as amended, and therefore it was not subject to Executive Order
12866 review.
This Proposal, if finalized as proposed, is not expected to be an
Executive Order 14192 regulatory action, because the proposed rule is
not a significant regulatory action under E.O. 12866.
List of Subjects in 17 CFR Part 165
Administrative practice and procedure, Government employees,
Investigations, Whistleblowing.
For the reasons stated in the preamble, the Commodity Futures
Trading Commission proposes to amend 17 CFR part 165 as follows:
PART 165--WHISTLEBLOWER RULES
0
1. The authority citation for part 165 continues to read as follows:
Authority: 7 U.S.C. 2, 5, 9, 12a(5), 13a, 13a-1, 13b, and 26.
[[Page 35926]]
Sec. 165.7 [Amended]
0
2. In Sec. 165.7(e)(1), remove the words ``by the Director of the
Division of Enforcement.''
0
3. Amend Sec. 165.9 by:
0
a. Redesignating paragraph (d) as paragraph (e); and
0
b. Adding a new paragraph (d) to read as follows:
Sec. 165.9 Criteria for determining amount of award.
* * * * *
(d) Additional considerations in connection with certain awards of
$5 million or less. (1) This paragraph (d) applies when the Commission
is considering any meritorious award application where:
(i) The statutory maximum award of 30 percent of the monetary
sanctions collected in any covered and related action(s), in the
aggregate, is $5 million or less, and the Commission determines that it
does not reasonably anticipate that future collections would cause the
statutory maximum award to be paid to any whistleblower to exceed $5
million in the aggregate;
(ii) None of the negative award factors specified in paragraphs
(c)(1) or (c)(3) of this section were found present with respect to the
claimant's award application and the award claim does not trigger Sec.
165.17 (concerning awards to whistleblowers who engage in culpable
conduct);
(iii) The claimant did not engage in unreasonable reporting delay
under paragraph (c)(2) of this section (although the Commission, in its
discretion, may in certain limited circumstances determine to waive
this criterion if the claimant can demonstrate that doing so based on
the facts and circumstances of the matter is consistent with the public
interest and the objectives of the whistleblower program); and
(iv) The Commission does not otherwise determine in its discretion
that application of the enhancement afforded by this paragraph (d)
would be inappropriate because either:
(A) The whistleblower's assistance in the covered action or related
action (as assessed under paragraph (b)(2) of this section) was, under
the relevant facts and circumstances, limited; or
(B) Providing the enhancement would be inconsistent with the public
interest, or the objectives of the whistleblower program.
(2) If the Commission determines that the criteria in paragraph
(d)(1) of this section are satisfied, the resulting payout to a
claimant for the original information that the claimant provided that
led to one or more successful covered or related action(s),
collectively, will be the maximum allowed under the statute.
(3) Notwithstanding paragraph (d)(2) of this section, if two or
more claimants qualify for an award in connection with any covered
action or related action and at least one of those claimants' award
applications qualifies under paragraph (d)(1) of this section, the
aggregate amount awarded to all meritorious claimants will be the
statutory maximum. In allocating that amount among the meritorious
claimants, the Commission will consider whether an individual
claimant's award application satisfies paragraphs (d)(1)(ii) and
(d)(1)(iii) of this section.
Sec. 165.10 [Amended]
0
4. In Sec. 165.10(a)(7), remove the words ``Division of Enforcement.''
0
5. 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, 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 at least two of the Commission's
Offices or Divisions (except the Office of the General Counsel) who
have not had direct involvement in the underlying enforcement action,
as designated by the General Counsel in consultation with the Executive
Director.
(3) Disclosure of whistleblower identifying information. The
General Counsel 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 General
Counsel shall have general authority to administer the whistleblower
program except as otherwise provided under this part.
Issued in Washington, DC, on June 11, 2026, by the Commission.
Christopher Kirkpatrick,
Secretary of the Commission.
NOTE: The following appendix will not appear in the Code of
Federal Regulations.
Appendix to Whistleblower Award Determination--Commission Voting
Summary
On this matter, Chairman Selig voted in the affirmative. No
Commissioner voted in the negative.
[FR Doc. 2026-12006 Filed 6-12-26; 8:45 am]
BILLING CODE 6351-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.