September 20, 2020

Volume X, Number 264

September 18, 2020

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CFTC Issues Guidance on Compliance Program Evaluations in Connection With Enforcement Matters

On September 10, the Commodity Futures Trading Commission’s Division of Enforcement (Division) issued guidance outlining factors to consider when evaluating compliance programs as part of enforcement matters.

The Division had previously issued guidance directing staff to take into consideration the effectiveness of a firm’s compliance program when recommending civil monetary penalties and non-monetary terms of a resolution. The September 10 guidance sets forth factors the Division will consider when evaluating the effectiveness of a compliance program, including whether the program was reasonably designed to “prevent the underlying misconduct at issue,” “detect the misconduct” and “remediate the misconduct.” The guidance additionally lists specific items for consideration with respect to prevention, detection and remediation, including but not limited to the adoption of effective written policies and procedures, the adequacy of internal surveillance and monitoring efforts, and the efficacy of mitigating any financial harm to others.

The September 10 guidance is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 257


About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm

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.


James M. Brady, Katten Muchin Law Firm, Finance Attorney

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court.