Compliance Weeds Articles

Now that summer is almost over, Chief Compliance Officers of swap dealers, major swap participants, and future commission merchants should be well underway in the process that ultimately will lead to the preparation of their firm’s Annual Compliance Report for the fiscal year ending 2013, and the certification of the report by the CCO or the Chief Executive of their firm.

CCOs that have not begun this process should do so promptly in order to avoid last minute conflicts with other senior officers over what information should be included in their firm’s Annual Compliance Report and how it should be stated. Late preparation could make possible disagreements more contentious because all certifications must be made “under penalty of law,” meaning that the certifying officer has potential administrative, civil and/or criminal liability should it be determined that an Annual Compliance Report was not accurate or complete and that the signatory had reason to know this.

A new article on the website of Gary DeWaal and Associates, “It’s 10 PM: FCMs, SDs, MSPs — Do You Know the Status of Your Firm’s 2013 Annual Compliance Report Preparation?,” provides some practical guidance for all CCOs and firm managers to consider when preparing their firm’s Annual Compliance Report.

On August 2, 2013, the Commodity Futures Trading Commission released a Rule Enforcement Review of the Chicago Mercantile Exchange for the period November 1, 2010 through October 31, 2011. In general the CFTC reviewed the Exchange’s compliance with core principles related to market surveillance and generally found that the CME’s routine market surveillance was adequate.

However the CFTC raised a number of concerns regarding the CME’s monitoring of so-called EFRP transactions (Exchange of Futures for Related Positions) that should prompt traders and futures commission merchants to examine how they conduct and oversee ERFP transactions – not just in connection with CME products, but products of other contract markets too.

What does this mean practically for traders and Future Commission Merchants?

In another post-MF Global development, the NFA on 22 May 2013 submitted to the CFTC for its approval proposed guidance related to internal control systems that must be adopted by all FCMs. Approval is expected. In submitting this guidance, NFA proposed certain minimum standards that must be part of each FCM’s internal control system, which […]