CFTC Clarifies CCO Reporting Requirements And Supervisory Relationships

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a staff advisory that clarified the necessary elements of reporting line requirements for Chief Compliance Officers ("CCOs") under CFTC Rule 3.3. It also outlined supervisory relationships that CCOs may maintain with senior management other than the board or the senior officer under certain circumstances. The staff advisory was a response to requests for guidance regarding the "practical implementation" of CCO reporting line requirements.

The DSIO clarified that it does not expect CCOs to seek direction from the board or a senior officer during the resolution of every compliance matter, and that it is sufficient for members of senior management (whose positions are below those of board members or senior officers) who are involved in the daily activities of registrants more directly to review compliance issues that arise "in the normal course."