CFTC adopts simpler rules for compliance officers

The Commodity Futures Trading Commission adopted rules that simplify requirements for compliance officers and harmonize the agency’s approach to compliance with the SEC.

The CFTC is an independent federal agency. It regulates the U.S. derivatives markets including futures, options, and swaps.

The agency said Tuesday the amended rules (pdf) “clarify a CCO’s duties by providing reasonable standards and guidance on effective compliance.”

“The amendments also modify the CCO annual report content and submission requirements to reduce report preparation burdens while also making the reports more effective.”

While simplifying the requirements for chief compliance officers, the new rules still require CCOs to be “actively engaged in administering a firm’s compliance policies and procedures.”

The CFTC said the amendments aren’t “intended to diminish the role and direct involvement of other senior officers, supervisors and other employees with more direct knowledge, expertise, and responsibilities for various regulated activities within their business lines.”

“Thus, while the CCO plays a central role in administering a firm’s policies and procedures, other personnel may implement the procedures on a day-to-day basis when undertaking related activities in the normal course of business.”

The agency said the new rules synchronize requirements with the SEC for compliance officers at security-based swap dealers.

“The further convergence of the two regimes will allow greater efficiencies for the market intermediaries registered with both agencies,” the CFTC said.

The CFTC’s enforcement division investigates violations of the Commodity Exchange Act and the CFTC Regulations — such as fraud, market manipulation, and illegal trade practices.

The agency started a whistleblower award program in August 2016.

There have been five awards under the program. The biggest was $30 million, announced last month.

The FCPA Blog | August 23, 2018