CFTC Issues Guidance on Chief Compliance Officer Annual Report Preparation
On December 4, the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission (CFTC) issued an advisory addressing the preparation of the Chief Compliance Officer (CCO) Annual Report for futures commission merchants, swap dealers and major swap participants. The CFTC advisory discusses a number of common deficiencies that the staff has identified in its review of the 2019 CCO Annual Reports and provides additional guidance to Registrants regarding the requirements of the CCO Annual Report in light of the deficiencies found.
In the advisory, DSIO staff address a number of sections of the CCO Annual Report, including: 1) areas for improvement; 2) financial, managerial, operational and staffing resources; 3) material non-compliance issues; 4) furnishing the annual report and related matters; and 5) the certification requirement. As a general matter, the staff found that firms failed to provide sufficient detail to allow staff to form a complete view of the firm’s compliance with applicable requirements. The staff encouraged firms to assure that their CCO Annual Reports align with the requirements and recommendations set out in the advisory as well as prior CFTC guidance.
More information, including access to the advisory, is available here.