On May 22, the Commodity Futures Trading Commission issued a Customer Advisory addressing the unique risks associated with certain trading vehicles that use futures contracts or other commodity interests. The CFTC noted that recent market volatility arising from the COVID-19 pandemic has led many investors to purchase shares of trading vehicles that use futures contracts

On May 19, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission proposed amendments to Part 3 of NFA’s Compliance Rules regarding the compliance procedures that control NFA’s disciplinary process. Specifically, the proposed amendments (1) revise NFA Compliance Rule 3-14 to increase the maximum penalty fine amount from $250,000 to $500,000 per violation; (2) modify the rules related to certain Business Conduct Committee’s practices; and (3) make minor technical amendments.
Continue Reading NFA Proposes Amendments to Part 3 of NFA’s Compliance Rules Regarding Disciplinary Process

On May 19, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission proposed technical amendment to several of NFA’s Rules and Interpretive Notices. In addition to correcting numerous cross-references and eliminating obsolete provisions, the proposed technical amendments add a definition of Swap Execution Facility (SEF) to NFA Compliance Rule 1-1 and require

On May 20, the Commodity Futures Trading Commission’s Division of Enforcement (Division) issued new guidance (Guidance) outlining factors the Division will consider in recommending civil monetary penalties (CMPs) imposed by the CFTC in enforcement actions. This is the first publicly issued Division CMP guidance since the CFTC published its penalty guidelines in 1994. The Guidance is designed to provide market participants with greater transparency as to Division staff’s decision-making criteria regarding CMPs.
Continue Reading CFTC Division of Enforcement Issues Civil Monetary Penalty Guidance

On May 19, the Commodity Futures Trading Commission published in the Federal Register a request for public comment on the CFTC’s draft 2020-2024 Strategic Plan (Strategic Plan). The current draft of the Strategic Plan includes a discussion of the CFTC’s mission, vision, core values, strategic goals and strategic objectives. The proposed strategic goals include:
Continue Reading CFTC Seeks Public Comments on 2020-2024 Strategic Plan

The Commodity Futures Trading Commission Divisions of Market Oversight (DMO), Swap Dealer and Intermediary Oversight (DSIO), and Clearing and Risk (DCR) (together, the Divisions) issued CFTC Letter 20-17 to remind Designated Contract Markets (DCMs), Futures Commission Merchants (FCMs) and Derivatives Clearing Organizations (DCOs) of their obligations to prepare for extreme market volatility, low liquidity and possibly negative pricing for certain contracts. The Divisions issued the advisory in light of unusually high volatility and negative pricing experienced in the May 2020 West Texas Intermediate (WTI), Light Sweet Crude Oil Futures contract on April 20 (the penultimate day of trading and expiration of the contract), although the guidance also applies to trading in other commodities.
Continue Reading CFTC Staff Issues Advisory Addressing Current Market Conditions

On May 13, National Futures Association (NFA) issued a Notice to Members addressing the recent increase in fraudulent phishing emails, including emails purporting to be from financial institutions or their employees. These urgent emails often include an infected attachment or link, a request for confidential information, or a link to a fraudulent website. With any email, NFA cautions members to verify the sender before responding and to ensure the validity of links or attachments before clicking on them.
Continue Reading NFA Issues Warning Regarding Phishing Emails

To address the latest COVID-19 developments and the impact on the derivatives industry, National Futures Association (NFA) is hosting a webinar focused on NFA’s current operations, regulatory approach and relief issued. The webinar is scheduled for May 27, 2020 at 9:30 a.m. CT.

The webinar is free, but registration is required. The webinar’s registration page