CFTC Announces 2019 Examination Priorities – A First for the Commission
For the first time, the Commodity Futures Trading Commission (CFTC) announced 2019 Examination Priorities for registrants of the Division of Market Oversight (DMO), Division of Swap Dealer & Intermediary Oversight (DSIO), and Division of Clearing & Risk (DCR).
DMO’s Compliance Branch’s 2019 Examination Priorities include: (1) cryptocurrency surveillance practices (2) surveillance for disruptive trading; (3) trade surveillance practices (selected elements); (4) block trade surveillance practices; (5) market surveillance practices (selected elements); (6) real-time market monitoring practices; (7) practices around market maker and trading incentive programs; and (8) DCMs’ relationships with and services received from regulatory service providers.
DSIO’s Compliance Branch’s 2019 Examination Priorities include: (1) withdrawal of residual interest from customer accounts; (2) accepted forms of non-cash margin; (3) compliance with segregation requirements; (4) FCM use of customer depositories; (5) FCM customer account documentation; and (6) SD/MSP relationships with third-party vendors.
DCR Priorities include identifying areas of weakness or non-compliance in activities that are critical to a safe and efficient clearing process. This includes examining financial resources, risk management, system safeguards and cyber-security policies, practices, and procedures to assess the maturity, capabilities, and overall resilience of the DCO.
To view the CFTC Release, please visit CFTC.gov.
Kennyhertz Perry regularly counsels CFTC market participants on the laws, rules, and regulatory developments affecting their business, including regulatory requirements, risk management, licensing and registration, sales and marketing practices and materials, manuals and training, day-to-day compliance. As a former Senior Trial Attorney at the CFTC and Chief Compliance Officer of a financial firm, Braden Perry assists companies and individuals in prospective CFTC compliance defending in enforcement actions.
About Kennyhertz Perry’s Commodities, Futures, and Derivatives Practice Group
Kennyhertz Perry advises clients on a wide range of commodities and derivatives regulatory matters. Kennyhertz Perry has experience in all types of derivative transactions and design structures to meet clients’ specific trading, financial and/or credit needs. The roots of the practice are in the commodities markets, where Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission. Our lawyers regularly advise our clients on compliance with the complex laws and regulations governing the securities and derivatives industries, including the Commodity Futures Modernization Act of 2000, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, the Securities Acts of 1933 and 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the SEC and CFTC regulations, the rules of the various derivatives exchanges and clearinghouses and other industry self-regulatory organizations and the “Blue Sky” state securities laws. Keeping abreast of regulatory developments is imperative, and enables our lawyers to guide clients on comment-making about proposed legislation and regulation, provide ongoing operational and compliance counseling, and offer advice on appropriate modifications of transaction structure and documentation.
Clients also benefit from Kennyhertz Perry’s experience in related areas of law, such as litigation, banking, securities, insurance, and its regular practice before the Commodity Futures Trading Commission. Leaders in the financial industry choose Kennyhertz Perry because the firm’s lawyers tailor their advice to the unique issues presented by each matter they handle.
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