The Securities and Exchange Commission (SEC) will seek to undo several changes to the agency’s whistleblower program enacted during the Trump administration.

Thursday’s proposed amendments to rules that guide the whistleblower program would allow whistleblowers to qualify for an SEC award even if they might be eligible for an award under another regulatory award program. Another change would clarify that even in cases of large awards (more than $100 million), the SEC would not move to reduce the size of the payout.

“I support these amendments because, if adopted, they would help ensure that whistleblowers are both incentivized and appropriately rewarded for their efforts in reporting potential violations of the law to the Commission,” said SEC Chair Gary Gensler in a statement.

The amendments were not unexpected, as Gensler had telegraphed his intention to rework the rules in August. Under changes enacted during the tenure of Gensler’s predecessor, Jay Clayton, the SEC indicated it would seek to limit large awards and deny payouts to whistleblowers eligible to receive bounties from another agency.

“The proposed rule change is designed to ensure that a whistleblower is not disadvantaged by another whistleblower program that would not give them as high an award as the SEC would offer,” Gensler said in his statement.

Republican Commissioner Hester Peirce objected to the changes, saying no new evidence had been produced to justify reversing rules that were so recently passed.

“Absent some pressing need to remedy inadvertent oversights, address unanticipated consequences, or deal with significant new factual developments, revisiting recently adopted rules subverts the regulatory consistency and certainty essential to well-functioning markets,” she wrote in a dissenting statement.

Last year, the SEC issued an interim procedure for handling whistleblower complaints while the rule changes were under review. Under the interim procedure, even if the SEC determined another whistleblower program is more suited to issue an award, the whistleblower could request the SEC’s decision be held in abeyance during the procedure period and reassessed when the new rules are in place.

Sean McKessy, chief of the SEC’s Office of the Whistleblower from 2011-16 who now represents whistleblowers as a partner at Phillips & Cohen, welcomed the agency’s reversal.

“The proposed amendments to the whistleblower award rules would undo some of the harmful rule changes the previous administration made, which added uncertainty to the process for determining whistleblower awards,” McKessy said. “Uncertainty can be one of the main deterrents to individuals deciding to come forward.”

The public comment period on the amendments will remain open for 60 days following publication of the proposing release on the SEC’s website or 30 days following publication in the Federal Register, whichever period is longer, according to a press release.

Beneficial ownership change

Also Thursday, the SEC proposed amendments to the rule regarding the submission of the beneficial owners who buy significant stakes in companies under the Exchange Act. The proposal would expand the rule to include certain types of derivative securities; shorten the filing deadline for beneficial ownership from 10 days to five days after a new ownership party crosses the 5 percent threshold; and require amendments be filed within one business day.

Gensler said in a press release the current system created “an information asymmetry” the SEC sought to address by shortening the deadline for filing information about who new beneficial owners are. The filing “can have a material impact on a company’s share price, so it is important that shareholders get that information sooner,” he said.

In her dissenting statement, Peirce said there was no justification for shortening the filing deadline for beneficial ownership information. The agency, by pushing for investors to get information about a new ownership stake in a company five days sooner, “invents investor harm and unduly paints the selling shareholder as a victim,” she said.

Peirce added, “Indeed, information asymmetries in this sense—where investors have equal access to disclosure from the issuer and insiders but come to different conclusions about the long-term prospects of a company based on their respective due diligence—are a feature, not a bug, of our capital markets.”