The U.S. Commodity Futures Trading Commission (“CFTC”) will be issuing its Guidance similar to the DOJ’s recent writing on Evaluating Corporate Compliance Programs, which sends a clear message that organizations need to invest and maintain a compliance program that helps deter and timely detect regulatory mishaps. The Guidance is expected to outline the elements the CFTC’s Enforcement Division will consider when evaluating whether an organization had an adequate compliance program prior to the alleged infraction. It will also look at whether the organization took steps to fix a problem after it discovered infraction. Download free e-book that focuses on Compliance Best Practices here!
Other key elements of the Guidance will more likely include:
- Is the compliance function independent
- Has the organization devoted adequate resources to preventing infractions
- Are there adequate internal surveillance and monitoring systems in place
- is the organization appropriately disciplining individuals responsible for misconduct
The CFTC’s Guidance offers fewer specifics about what a compliance program should look like and is meant to provide a framework for discussions about corporate compliance between companies and the CFTC.
Remember, the CFTC issued a memorandum on May 20, 2020 (2020 Memo), providing guidance regarding the factors the CFTC considers when recommending civil monetary penalties for violations of the Commodity Exchange Act as amended (the CEA), or CFTC’s rules and regulations. The 2020 Memo represented CFTC’s first independent statement in some time addressing monetary penalties and included statements by CFTC Chairman Heath Tarbert and Division Director James McDonald’s that emphasized their view concerning the importance of transparency in the CFTC’s enforcement efforts. Factors referenced in the 2020 Memo were incorporated into the Division’s updated Enforcement Manual issued on the same date.
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