The Commodity Futures Trading Commission on Aug. 21 unanimously approved final amendments clarifying and simplifying its regulations governing chief compliance officer duties and annual compliance reporting requirements for futures commission merchants, swap dealers, and major swap participants.
The amendments clarify a CCO’s duties by providing reasonable standards and guidance on effective compliance. The amendments also modify the CCO annual report content and submission requirements to reduce report preparation burdens while also making the reports more effective.
By adopting these amendments, the CFTC is also further synchronizing the CCO regulations with the comparable regulations adopted by the Securities and Exchange Commission for security-based swap dealers. The further convergence of the two regimes will allow greater efficiencies for the market intermediaries registered with both agencies.
The action is consistent with CFTC Chairman Christopher Giancarlo’s Project KISS, an agency-wide initiative to adopt appropriate changes and simplify agency rules, regulations, and practices to make them efficient and less burdensome. “Clarifying the role and responsibilities of the CCO should enable greater accountability and improve overall compliance, as well as reduce burdens on CCOs and uncertainty for registrants,” Giancarlo said in a statement. “The rule continues to impose a duty on CCOs to resolve matters but within the practical limits of their position at the CFTC-registered entity.”
“The rule also continues to impose a duty for the CCO to undertake an annual review but reduces the burdens associated with the review, which will allow the CCO to devote more time and resources to compliance activities at the registrant, Giancarlo added. In addition, further harmonizing definitions and CCO duties of dual CFTC-SEC registrants should improve efficiency and further reduce the burdens on CCOs.”