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ARTICLE · 04 AUGUST 2022

Futures Audit Trails Requirements: A Compliance Minefield?

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Recently ICE Futures US filed notice with the CFTC of amendments to its audit trail rule.

United StatesAccounting and Audit
Stephen R. Morris
Stephen R. Morris
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US futures exchange rules require participants with direct access to the exchange's trading systems to maintain an "electronic audit trail" of all order messages submitted to the exchange. The technical specifications associated with this audit trail requirement are highly prescriptive. Compliance with the requirement – which exchange market regulation divisions monitor with vigilance, typically by way of annual examinations – requires close cooperation among Compliance, Operations and IT personnel within firms that trade through direct access. Audit trails must be complete and accurate and account for every electronic communication a firm's systems send to or receive from the exchange. (Even what might seem de minimis omissions and errors can and do result in fines.) Audit trail records must be maintained for a minimum of five years.

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