Unknown. Interpretation
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/register/2015/08/10/2015-19508A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
--- schema: federal-register doc_type: fedreg source_file: FR-2015-08-10.xml --- 80 153 Monday, August 10, 2015 Contents Agriculture Agriculture Department See Grain Inspection, Packers and Stockyards Administration NOTICES Requests for Nominations: National Genetic Research Advisory Council, 47895 2015-19573 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 47925-47926 2015-19579 Coast Guard Coast Guard RULES Drawbridge Operations:
Atlantic Intracoastal Waterway, Atlantic City, NJ, 47851-47852 2015-19560 2015-19561 Atlantic Intracoastal Waterway, Surf City, NC, 47850-47851 2015-19562 Safety Zones: NOBLE DISCOVERER, Outer Continental Shelf Drillship, Chukchi Sea, AK, 47852-47855 2015-19367 Waddington Homecoming Fireworks, St. Lawrence River, Ogden Island, NY, 47855-47857 2015-19506 Commerce Commerce Department See Foreign-Trade Zones Board See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration See National Telecommunications and Information Administration Comptroller Comptroller of the Currency NOTICES Agency Information Collection Activities;
Proposals, Submissions, and Approvals: Market Risk, 47987-47988 2015-19576 Defense Department Defense Department RULES Assistance to Non-Government, Entertainment-Oriented Media Productions, 47834-47850 2015-19279 Energy Department Energy Department See Energy Efficiency and Renewable Energy Office See Federal Energy Regulatory Commission NOTICES Applications To Export Electric Energy: EDF Trading North America, LLC, 47912-47913 2015-19642 Energy Efficiency Energy Efficiency and Renewable Energy Office NOTICES Meetings:
Biomass Research and Development Technical Advisory Committee, 47913 2015-19574 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Arizona; Infrastructure Requirements for the 2008 Lead
(Pb)and the 2008 8-Hour Ozone National Ambient Air Quality Standards, 47859-47862 2015-19499 Colorado; Interstate Transport of Pollution for the 2006 24-Hour PM2.5 NAAQS, 47862-47864 2015-19500 Wyoming; Interstate Transport of Pollution for the 2006 24-Hour PM2.5 NAAQS, 47857-47859 2015-19501 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Mississippi; Memphis, TN-MS-AR Emissions Statements for the 2008 8-Hour Ozone Standard, 47883-47886 2015-19589 Approval and Promulgation of Implementation Plans: Washington; Update to the Spokane Regional Clean Air Agency Solid Fuel Burning Device Standards, 47880-47883 2015-19280 NOTICES Cross-Media Electronic Reporting: Authorized Program Revision Approval, State of Washington, 47924-47925 2015-19577 Meetings: Board of Scientific Counselors Safe and Sustainable Water Resources Subcommittee; Correction, 47922 2015-19592 Proposed Partial Consent Decrees: Clean Air Act Citizen Suit, 47922-47924 2015-19599 Proposed Settlements Under CERCLA: Gowanus Canal Superfund Site, Brooklyn, Kings County, NY, 47922 2015-19601 Registration Review Proposed Interim Decisions; Availability, 47919-47922 2015-19590 Federal Aviation Federal Aviation Administration PROPOSED RULES Airworthiness Directives: Fiberglas-Technik Rudolf Lindner GmbH and Co. KG Gliders, 47871-47874 2015-19323 Federal Communications Federal Communications Commission PROPOSED RULES Emergency Alert System, 47886-47894 2015-18089 NOTICES Radio Broadcasting Services: AM or FM Proposals To Change the Community of License, 47925 2015-19575 Federal Emergency Federal Emergency Management Agency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Assistance for Offsite Radiological Emergency Preparedness and Planning, 47943-47945 2015-19591 Federal Energy Federal Energy Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 47914-47916 2015-19559 Combined Filings, 47916-47919 2015-19553 2015-19563 Declaratory Orders: Wolverine Pipe Line Co., 47916 2015-19556 Environmental Assessments; Availability, etc.: Coleman Hydro, LLC, 47914 2015-19557 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Chevron Power Holdings Inc., 47913-47914 2015-19554 Thunder Spirit Wind, LLC, 47916 2015-19555 Late Interventions: Murphy Dam, LLC, 47918 2015-19558 Fish Fish and Wildlife Service NOTICES Meetings: Advisory Council on Wildlife Trafficking, 47945-47946 2015-19516 Permits: Endangered Species, 47947-47948 2015-19511 Requests for Nominations: Advisory Council on Wildlife Trafficking, 47946 2015-19519 Food and Drug Food and Drug Administration NOTICES Meetings: Anesthetic and Analgesic Drug Products and Drug Safety and Risk Management Advisory Committees, 47926-47928 2015-19547 2015-19548 Foreign Assets Foreign Assets Control Office NOTICES Blocking or Unblocking of Persons and Properties, 47988-47996 2015-19595 2015-19596 2015-19597 Foreign Trade Foreign-Trade Zones Board NOTICES Applications for Expansion: Foreign-Trade Zone 281, Miami, FL; New Magnet Site, 47897-47898 2015-19607 Expanded Production Authority: ASO, LLC, Subzone 169A, Foreign-Trade Zone 169, Sarasota, FL; Denials, 47895-47896 2015-19603 Proposed Production Activities: Foreign-Trade Zone 46, Cincinnati, OH; Festo Corp., 47896-47897 2015-19609 Subzone Expansions; Applications: Subzone 231A, Lathrop, CA; Medline Industries, Inc., 47897 2015-19605 Geological Geological Survey NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Cooperative Geologic Mapping Program (EDMAP and STATEMAP), 47948-47949 2015-19503 Grain Inspection Grain Inspection, Packers and Stockyards Administration PROPOSED RULES Requests for Information: Market Agencies Selling on Commission; Purchases From Consignment, 47871 2015-19528 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Food and Drug Administration See Health Resources and Services Administration See National Institutes of Health NOTICES Health IT Standards Committee: Schedule for the Assessment of Health IT Policy Committee Recommendations, 47934-47935 2015-19620 Requests for Nominations: Health IT Policy Committee and Health IT Standards Committee, 47935-47936 2015-19621 Statement of Organization, Functions, and Delegations of Authority: Office of the Assistant Secretary for Public Affairs, 47931-47934 2015-19522 Health Resources Health Resources and Services Administration NOTICES Health Center Program: Class Deviation From Competition Requirements, 47928-47931 2015-19524 Meetings: National Advisory Committee on Rural Health and Human Services, 47931 2015-19546 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency See U.S. Customs and Border Protection Housing Housing and Urban Development Department PROPOSED RULES Retrospective Review: Improving the Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs Participants, 47874-47880 2015-19529 Indian Affairs Indian Affairs Bureau NOTICES HEARTH Act Approval of Seminole Tribe of Florida Regulations, 47949-47950 2015-19604 Industry Industry and Security Bureau NOTICES Orders Denying Export Privileges: Peter Gromacki, 47898-47899 2015-19570 Interior Interior Department See Fish and Wildlife Service See Geological Survey See Indian Affairs Bureau See Land Management Bureau Internal Revenue Internal Revenue Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Offshore Voluntary Disclosure Program, 47998-47999 2015-19521 Meetings: Taxpayer Advocacy Panel Joint Committee, 47999 2015-19513 Taxpayer Advocacy Panel Notices and Correspondence Project Committee, 47999 2015-19518 Taxpayer Advocacy Panel Special Projects Committee, 47998 2015-19515 Taxpayer Advocacy Panel Tax Forms and Publications Project Committee, 47996-47997 2015-19509 Taxpayer Advocacy Panel Taxpayer Communications Project Committee, 47996 2015-19517 Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee, 47997 2015-19510 Requests for Nominations: Advisory Committee on Tax Exempt and Government Entities, 47997 2015-19520 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Passenger Vehicle and Light Truck Tires From the People's Republic of China, 47902-47907 2015-19615 Certain Pasta From Italy, 47900-47902 2015-19613 Seamless Refined Copper Pipe and Tube From Mexico, 47908-47909 2015-19616 Applications for Duty-Free Entry of Electron Microscopes: University of Maryland Baltimore County, et al., 47909-47910 2015-19614 Applications for Duty-Free Entry of Scientific Instruments: University of Texas Health Science Center, San Antonio, TX; Withdrawal, 47907-47908 2015-19610 W.M. Keck Observatory, et al., 47899-47900 2015-19598 Labor Department Labor Department See Occupational Safety and Health Administration Land Land Management Bureau NOTICES Alaska Native Claims Selection, 47950-47951, 47953 2015-19602 2015-19608 Meetings: Utah Resource Advisory Council/Recreation Resource Advisory Council, 47950 2015-19564 Realty Actions: Pocatello Resource Management Plan, Segregation of Land for Proposed Non-Competitive (Direct) Sale in Caribou County, ID, 47951-47953 2015-19606 Legal Legal Services Corporation NOTICES Meetings; Sunshine Act, 47956-47957 2015-19673 National Institute National Institutes of Health NOTICES Meetings: Eunice Kennedy Shriver National Institute of Child Health and Human Development, 47936-47937 2015-19542 2015-19543 2015-19544 2015-19545 National Institutes of Health Senior Executive Service 2015 Performance Review Board Members, 47936 2015-19619 National Oceanic National Oceanic and Atmospheric Administration RULES Fisheries of the Exclusive Economic Zone Off Alaska: Prohibited Species Catch; Emergency Rule, 47864-47870 2015-19428 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Surfclam/Ocean Quahog Individual Transferable Quota Administration, 47910-47911 2015-19567 Meetings: Hydrographic Services Review Panel, 47910 2015-19552 National Telecommunications National Telecommunications and Information Administration NOTICES Internet Assigned Numbers Authority Stewardship Transition Consolidated Proposal and Internet Corporation for Assigned Names and Numbers Accountability Enhancements, 47911-47912 2015-19525 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Environmental Assessments; Availability, etc.: Entergy Nuclear Operations, Inc.; Vermont Yankee Nuclear Power Station, 47960-47964 2015-19587 Guidance: Human Factors Engineering, 47958-47959 2015-19585 Use of Accreditation in Lieu of Commercial Grade Surveys for Procurement of Laboratory Calibration and Test Services, 47957-47958 2015-19549 Meetings; Sunshine Act, 47958 2015-19641 Occupational Safety Health Adm Occupational Safety and Health Administration NOTICES Applications for Expansion of Recognition: TUV Rheinland of North America, Inc., 47953-47955 2015-19593 Expansions of Recognition: Curtis-Straus, LLC, 47955-47956 2015-19594 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Hazardous Materials: Anticipated Delay in Administrative Appeal Decisions, 47987 2015-19507 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 47964 2015-19531 Securities Securities and Exchange Commission RULES Interpretation of the Whistleblower Rules Under the Securities Exchange Act, 47829-47831 2015-19508 NOTICES Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc., 47966-47968 2015-19534 EDGX Exchange, Inc., 47964-47966 2015-19535 Miami International Securities Exchange, LLC, 47980-47982 2015-19540 Municipal Securities Rulemaking Board, 47976-47978 2015-19539 NASDAQ Stock Market, LLC, 47968-47976 2015-19537 2015-19538 New York Stock Exchange, LLC, 47978-47980 2015-19536 Small Business Small Business Administration NOTICES Privacy Act; Systems of Records, 47982-47984 2015-19629 Social Social Security Administration RULES Social Security Number Card Applications, 47831-47834 2015-19568 State Department State Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Electronic Choice of Address and Agent, 47984-47985 2015-19584 Culturally Significant Objects Imported for Exhibition: Design for Eternity—Architectural Models From the Ancient Americas, 47985 2015-19581 Portrait Head of King Shulgi, 47985 2015-19580 Meetings: International Security Advisory Board, 47984 2015-19582 Trade Representative Trade Representative, Office of United States NOTICES Public Hearings: China's Compliance with WTO Commitments, 47985-47986 2015-19523 Transportation Department Transportation Department See Federal Aviation Administration See Pipeline and Hazardous Materials Safety Administration Treasury Treasury Department See Comptroller of the Currency See Foreign Assets Control Office See Internal Revenue Service Customs U.S. Customs and Border Protection NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Canadian Border Boat Landing Permit, 47937-47938 2015-19566 Guam-CNMI Visa Waiver Information, 47942-47943 2015-19565 Charter Renewals: User Fee Advisory Committee, 47943 2015-19611 National Customs Automation Program: Automated Commercial Environment Modifications, 47938-47942 2015-19532 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 80 153 Monday, August 10, 2015 Rules and Regulations SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 241 [Release No. 34-75592] Interpretation of the SEC's Whistleblower Rules Under Section 21F of the Securities Exchange Act of 1934 AGENCY: Securities and Exchange Commission. ACTION: Interpretation. SUMMARY: The Securities and Exchange Commission (Commission or SEC) is issuing this interpretive rule to clarify that, for purposes of the employment retaliation protections provided by Section 21F of the Securities Exchange Act of 1934 (“Exchange Act”), an individual's status as a whistleblower does not depend on adherence to the reporting procedures specified in Exchange Act Rule 21F-9(a), but is determined solely by the terms of Exchange Act Rule 21F-2(b)(1). DATES: Effective August 10, 2015. FOR FURTHER INFORMATION CONTACT: Jane Norberg, Deputy Chief of the Office of the Whistleblower, Division of Enforcement, at
(202)551-4790; Brian A. Ochs, Senior Special Counsel, Office of the General Counsel, at
(202)551-5067; Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. SUPPLEMENTARY INFORMATION: I. Background In Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, 12 4 Stat. 1376, 1841-49 (2010), Congress amended the Exchange Act to add Section 21F, 15 U.S.C. 78u-6(h)(1), entitled “Securities Whistleblower Incentives and Protection.” Section 21F established a series of new incentives and protections for individuals to report possible violations of the federal securities laws. Generally speaking, these incentives and protections take three forms—monetary awards for providing information, heightened confidentiality assurances, and enhanced employment retaliation protections. In May 2011, the Commission issued legislative rules (“whistleblower rules”) after notice-and-comment rulemaking to implement the provisions of Section 21F. The Commission is now issuing this interpretive rule to clarify the meaning and application of certain of those rules. As explained below, an individual may qualify as a whistleblower for purposes of Section 21F's employment retaliation protections irrespective of whether he or she has adhered to the reporting procedures specified in Rule 21F-9(a). Rule 21F-2(b)(1) alone governs the procedures that an individual must follow to qualify as a whistleblower eligible for Section 21F's employment retaliation protections. II. Interpretation When we promulgated our legislative rules to implement the whistleblower program, we recognized that Section 21F is ambiguous on the issue of the scope of the employment retaliation protections afforded thereunder. On the one hand, Section 21F(h)(1)(A) includes a broad catchall provision that prohibits an employer from, among other things, retaliating against a whistleblower for “making disclosures that are required or protected under” the Sarbanes-Oxley Act of 2002, the Exchange Act, 18 U.S.C. 1513(e), “and any other law, rule, or regulation subject to the jurisdiction of the Commission.” 1 As the Commission explained in the adopting release that accompanied the whistleblower rules, the reporting covered by this provision includes “report[s] to persons or governmental authorities *other than the Commission* .” 2 But on the other hand, the employment retaliation protections afforded to whistleblowers under Section 21F could be read as limited to only those individuals who provide the Commission with information; this is because under Section 21F(a)(6) the “term `whistleblower' means any individual who provides . . . information relating to a violation of the securities laws *to the Commission,* in a manner established, by rule or regulation, by the Commission.” (Emphasis added). 1 Section 21F(h)(1)(A) provides as follows: “(A) In General. No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—(i) in providing information to the Commission in accordance with this section;
(ii)in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or
(iii)in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 *et seq.* ), this chapter [ *i.e.,* the Exchange Act], including section 78j-1(m) of this title [ *i.e.,* Section 10A(m) of the Exchange Act], section 1513(e) of Title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission.” Clause (iii), which is a catchall provision, provides employment retaliation protection for certain internal reporting at public companies and for certain disclosures to the U.S. Department of Justice by expressly incorporating the “disclosures that are required or protected under the Sarbanes-Oxley Act,” which includes Sarbanes-Oxley Section 806. Section 806, in turn, prohibits employment retaliation against an employee of a public company (or a subsidiary thereof) based on certain disclosures of securities law violations to “a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discovery, or terminate misconduct)” or to a “Federal regulatory or law enforcement agency.” 15 U.S.C. 1514A(1). 2 Securities Whistleblower Incentives and Protections, 76 FR 34300, 34304 (June 13, 2011) (emphasis in original). To resolve this ambiguity, the Commission in Rule 21F-2 promulgated two separate definitions of “whistleblower.” These two definitions apply in different circumstances and each involves its own specified reporting procedures that must be satisfied in order for an individual to qualify under the particular definition. The first definition, which is set forth in Rule 21F-2(a), mirrors the statutory definition of whistleblower. It provides in pertinent part that an individual is “a whistleblower if, alone or jointly with others, [the individual] provide[s] the Commission with information pursuant to the procedures set forth in [Rule] 21F-9(a).” This definition of whistleblower applies *only* to the award and confidentiality provisions of Section 21F. The second whistleblower definition, which is set forth in Rule 21F-2(b)(1), provides in pertinent part that, “ *[f]or purposes of the anti-retaliation protections* afforded by Section 21F(h)(1) of the Exchange Act . . . , [an individual is] a whistleblower if . . . [the individual] provide[d] that information in a manner described in Section 21F(h)(1)(A) of the Exchange Act[.]” Rule 21F-2(b)(1)(ii). This definition—unlike the whistleblower definition in Rule 21F-2(a) that applies to the award and confidentiality provisions—does not require reporting in accordance with Rule 21F-9(a)'s procedures. We also adopted Rule 21F-9(a) to specify the reporting procedures that must be followed by an individual who seeks to qualify as a whistleblower under Rule 21F-2(a) and thus to be eligible for an award and the heightened confidentiality protections. Rule 21F-9(a) provides in pertinent part that, “[t]o be considered a whistleblower under Section 21F . . . , [an individual] must submit [his or her] information . . . by either of these methods:
(1)Online, through the Commission's Web site . . . ; or
(2)By mailing or faxing a Form TCR . . . to the SEC Office of the Whistleblower . . . .” Since our adoption of the whistleblower rules, we have consistently understood Rule 21F-9(a) as a procedural rule that applies *only* to help determine an individual's status as a whistleblower for purposes of Section 21F's award and confidentiality provisions. 3 Similarly, it has been our consistent view that Rule 21F-2(b)(1) alone controls the reporting methods that will qualify an individual as a whistleblower for the retaliation protections. 3 *See generally* SEC Staff Report, 2014 Annual Report to Congress on the Dodd-Frank Whistleblower Program, 19 (available at: *http://www.sec.gov/about/offices/owb/annual-report-2014.pdf* ) (explaining that from the time it promulgated the whistleblower rules, the Commission has taken the view that the employment retaliation protections “apply not just to individuals who report to the SEC but also to individuals when they, among other things, report potential securities law violations internally at public companies”; also explaining that the Commission has “consistently” opposed the contrary interpretation). Notwithstanding our view that Rule 21F-2(b)(1) alone controls in the context of determining the relevant reporting procedures for an individual to qualify as a whistleblower eligible for Section 21F's employment retaliation protections, the Court of Appeals for the Fifth Circuit expressed some uncertainty about this reading in a recent decision. 4 Although we appreciate that if read in isolation Rule 21F-9(a) could be construed to require that an individual must report to the Commission before he or she will qualify as a whistleblower eligible for the employment retaliation protections provided by Section 21F, that construction is not consistent with Rule 21F-2 and would undermine our overall goals in implementing the whistleblower program. We reach this conclusion for several reasons. 4 *Asadi* v. * G.E. Energy (U.S.A.), L.L.C.,* 720 F.3d 620, 630 (5th Cir. 2013). *First,* as the text of Rule 21F-2(b)(1) states, “for purposes of Section 21F's employment retaliation protections,” an individual qualifies as a whistleblower entitled to the employment retaliation protection whenever he or she makes any of the broader array of disclosures specified in Section 21F(h)(1)(A). 5 The fact that Rule 21F-2(b)(1) expressly and specifically applies in the employment retaliation context demonstrates that it should control over Rule 21F-9(a). 6 5 In contrast, Rule 21F-2(a)(2) states that “[t]o be eligible for an award,” an individual must submit original information “to the Commission in accordance with the procedures and conditions described in Rules 21F-4, 21F-8, *and 21F-9.”* (Emphasis added). In addition, Rule 21F-2(a)(1) specifically cross-references the procedures set forth in Rule 21F-9(a), whereas Rule 21F-2(b)(1) does not contain a similar cross-reference. 6 *See, e.g.,* *In re Gulevsky,* 362 F.3d 961, 963 (7th Cir. 2004) (“[W]hen both a specific and a general provision govern a situation, the specific one controls.”) (quoting *Morales* v. * Trans World Airlines, Inc.,* 504 U.S. 374, 384-85, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)). *Second,* Rule 21F-2(b)(1)(iii) expressly provides that “[t]he anti-retaliation protections apply whether or not [an individual] satisf[ies] the requirements, procedures and conditions to qualify for an award.” As Rule 21F-2(a)(2) makes plain, the reporting procedures specified in Rule 21F-9(a) are among the procedures that an individual must follow to recover an award. The contrast between these provisions further supports our interpretation that the availability of employment retaliation protection is not conditioned on an individual's adherence to the Rule 21F-9(a) procedures. 7 7 We note that, other than Rule 21F-2(b), all of the other rules that the Commission adopted to implement the whistleblower program deal exclusively with the award and confidentiality provisions. *Finally,* our interpretation best comports with our overall goals in implementing the whistleblower program. Specifically, by providing employment retaliation protections for individuals who report internally first to a supervisor, compliance official, or other person working for the company that has authority to investigate, discover, or terminate misconduct, our interpretive rule avoids a two-tiered structure of employment retaliation protection that might discourage some individuals from first reporting internally in appropriate circumstances and, thus, jeopardize the investor-protection and law-enforcement benefits that can result from internal reporting. 8 Under our interpretation, an individual who reports internally and suffers employment retaliation will be no less protected than an individual who comes immediately to the Commission. Providing equivalent employment retaliation protection for both situations removes a potentially serious disincentive to internal reporting by employees in appropriate circumstances. A contrary interpretation would undermine the other incentives that were put in place through the Commission's whistleblower rules in order to encourage internal reporting. 9 8 We note that a contrary interpretation would also create a two-tiered scheme of employment retaliation protection even as between individuals who report possible securities fraud violations or violations of SEC rules or regulations to the Commission; specifically, if an individual comes forward to report information to the Commission in a manner *other than those specified in Rule21F-9(a),* that individual would not qualify for the employment retaliation protections of Section 21F. *See* Section 21F(h)(1)(A)(i) & (ii). But under our reading of Section 21F and the whistleblower rules, such individuals would be afforded employment retaliation protection under the catchall language of Section 21F(h)(1)(A)(iii)—which incorporates the protections of Section 806 of the Sarbanes-Oxley Act—irrespective of the fact that they did not comply with the technical reporting requirements of Rule 21F-9(a). 9 *See, e.g.,* Exchange Act Rule 21F-4(c)(3) (providing that an individual who reports internally can collect a whistleblower award from the Commission if his internal report to the company or entity results in a successful covered action); Exchange Act Rule 21F-4(b)(7) (providing that an individual who first reports pursuant to an entity's internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law and within 120 days reports to the Commission will be treated for purposes of an award as if the submission to the Commission had been made at the earlier internal reporting date); Exchange Act Rule 21F-6(a)(4) (providing that when determining the amount of an award, the Commission will consider as a plus-factor the whistleblower's participation in an entity's internal compliance procedures). For the foregoing reasons, we are issuing this interpretation to clarify that, for purposes of Section 21F's employment retaliation protections, an individual's status as a whistleblower does not depend on adherence to the reporting procedures specified in Rule 21F-9(a). List of Subjects in 17 CFR Part 241 Securities. Amendments to the Code of Federal Regulations For the reasons set out above, the Commission is amending title 17, chapter II of the Code of Federal Regulations as set forth below: PART 241—INTERPRETATIVE RELEASES RELATING TO THE SECURITIES EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS THEREUNDER 1. Part 241 is amended by adding Release No. 34-75592 to the list of interpretive releases to read as follows: Subject Release No. Date Federal Registe r Vol. and page * * * * * * * Interpretation of the SEC's Whistleblower Rules under Section 21F of the Securities Exchange Act of 1934 34-75592 Aug. 4, 2015 [Insert FR Volume Number] FR [Insert FR Page Number]. By the Commission. Dated: August 4, 2015. Brent J. Fields, Secretary. [FR Doc. 2015-19508 Filed 8-7-15; 8:45 am]
Connectionstraces to 3
7 references not yet in our index
- 17 CFR 241
- Pub. L. 111-203
- 4 Stat. 1376
- 15 USC 1514A(1)
- 720 F.3d 620
- 362 F.3d 961
- 504 U.S. 374
Citation graph
cites case law
Unknown
Interpretation
F. App'x720 F.3d 620
F. App'x362 F.3d 961
SCOTUS504 U.S. 374
Cite17 CFR 241
Pub. L.Pub. L. 111-203
Cites 10 · showing 8Cited by 0 across 0 sources