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.