CFTC Releases Rule Enforcement Review of the North American Derivatives Exchange
The Commodity Futures Trading Commission Division of Market Oversight (DMO) recently released the results of a rule enforcement review of the North American Derivatives Exchange Inc. (Nadex). The review covered a one-year target period and evaluated Nadex’s compliance with elements of Core Principles 2 (Compliance with Rules) and 12 (Protection of Markets and Market Participants), including compliance with relevant CFTC regulations related to these Core Principles.
DMO found that Nadex allocates staff, information technology and other resources to comply with Core Principles 2 and 12. Nadex also maintains a rulebook and written policies and procedures for its staff. However, DMO identified certain deficiencies relating to Nadex’s trade practice investigations and made recommendations regarding Nadex’s capacity to detect and investigate rule violations. In addition, DMO also identified a deficiency related to Core Principle 7 (Availability of General Information), noting that Nadex had failed to disclose relevant information regarding its market maker programs. Nadex has since cured this deficiency.
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