The Securities and Exchange Commission pushed back its release of the final whistleblower rules to between May and July, according to the agency's schedule for implementing rules under the Dodd-Frank Act. They were previously scheduled to be implemented in April.

This change contradicts the SEC's whistleblower page, which states that the rules would be approved before the  April 21 deadline:

Implementation: Regulations are required to be adopted no later than April 21, 2011 (9 months from enactment). However, because the new statutory provisions apply to any original information provided to the Commission on or after July 22, 2010, implementing rules will be proposed and adopted earlier than this nine-month mark. Compliance with these rules will be required to qualify for an award.

The proposed rules state that final versions would be released no later than April 17.

The whistleblower rules would award a bounty to eligible insiders who provide the SEC with original information within a certain time-frame. These whistleblowers would also be protected from negative retaliation from their employer because they reported this information.  

The high volume of comments received (240 through March) may be a reason for the delay. Commenters particularly expressed concern over the rulemaking's potential to increase whistleblowing, law suits, and compliance costs. For example, a January 4 letter from Jeffrey Rubin of the American Bar Association, called on the Commission “to eliminate incentives for frivolous or irresponsible reporting, to avoid rewarding culpable persons, and to consider the effects the rules may have on companies' internal compliance programs and legal privileges.”

In a December 17 letter, David Baris, executive director of the American Association of Bank Directors recommended that the final rule reflect changes to preserve some of the board of directors' authority over its compliance functions. “These include barring any employee from being considered a whistleblower or from being deemed to provide original information unless the employee reports all of the information that is being provided to the SEC to the Audit Committee of the company at the same time or prior to filing the information with the SEC,” Baris said. “In addition, the SEC should assure that the information it receives from the purported whistleblower is made available to the company contemporaneously.”

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