Federal Register: CFTC Proposes To Simplify Certain SRO Financial Surveillance Program Requirements

The CFTC proposal to simplify the requirements for self-regulatory organizations ("SROs") conducting financial surveillance on futures commission merchants ("FCMs") was published in the Federal Register. Comments on the proposal must be submitted by September 4, 2018.

As previously covered, the proposal would amend CFTC Rule 1.52 ("Self-Regulatory Organization Adoption and Surveillance of Minimum Financial Requirements") and is a response to public feedback that current regulations regarding FCM surveillance requirements are burdensome and costly. The CFTC proposal would restrict the scope of a third-party evaluation of an SRO's financial surveillance program to a review of the auditing standards employed by the SRO when conducting FCM examinations. The proposal also makes more flexible the timespan as to when an SRO must use a third-party expert to assess its FCM examination standards.