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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.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume IX, Number 340

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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

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312-902-5372
Jack West Financial Attorney Katten
Associate

Jack West is an associate in the Financial Markets and Funds practice.

312-902-5463