Proposed Regulation 21F, that the U.S. Securities and Exchange Commission is currently reviewing, could impact the SEC whistleblower program. To receive a cash award under the program, a whistleblower must voluntarily disclose original information that leads to a successful enforcement in which the SEC obtains an order of monetary sanctions in excess of $1 million. The SEC sets the whistleblower’s award within a range of 10-30% of the sanctions collected. In setting an award, the SEC must comply with Section 21F of the Securities Exchange Act.

In June 2018, the SEC proposed new rules for the whistleblower program that would give the SEC more flexibility in determining awards. For relatively small awards, under $2 million, the new rule would allow the SEC to adjust the award upward. However, if the award is likely to exceed $30 million, the SEC could limit the award to 10% of the sanctions collected.

Under the current rules and Section 21F of the Securities Exchange Act, the SEC is to consider several factors in setting the award, including the degree of assistance and the significance of the information provided by the whistleblower. An emphasis under the proposed rule on the amount likely to be collected, instead of the factors in Section 21F, may discourage whistleblowers from coming forward, especially in very large cases.

To learn more about these and other proposed changes, visit the SEC website.