Last year, I blogged about the newly adopted Part 165 of the CFTC regulations, which implements the CFTC’s whistleblower program under the Dodd-Frank Act. Last week, the NFA issued a notice reminding its members that CFTC Regulation 165.19 specifically provides that a pre-dispute arbitration agreement arising under the whistleblower rules is invalid. As a result, the NFA recommends that its members ensure that employment agreements specifically exclude claims arising under Part 165 of the CFTC Rules.
Further, the NFA informed its members that, although NFA’s arbitration rules are mandatory at the election of the person filing a claim, the NFA would not honor any pre-dispute arbitration agreements that purport to require an associate to file a claim that arises under the whistleblower rules. However, a member would still be obligated to arbitrate the dispute if the associate voluntarily elects to file the claim against the member firm.