CFTC Oversight Division Concludes Evaluation of CBOE Futures’ Transparency

After one year, the CFTC determined that CBOE Futures did possess adequate trade practice surveillance

The US Commodity Futures Trading Commission’s (CFTC) has issued the results of a rule enforcement review of the CBOE Futures Exchange, LLC, which had been subject of a previous evaluation of its trade practice surveillance program, per a recent CFTC manifest.

The CFTC’s Division of Market Oversight had been conducting a rule enforcement review of the CBOE Futures that covered a one-year period ending June 24, 2016. The evaluation was investigating the levels of compliance with Designated Contract Market Core Principles 2, as well as requisite CFTC regulations related to the exchange’s trade practice surveillance program.

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After more than a year of observation, the CFTC Division determined that CBOE Futures did qualify as an adequate trade practice surveillance program, though it did contain specific deficiencies that were identified in the evaluation.

Moreover, the Division also recommended that CBOE Futures continue to ascertain what the underlying reasons for such a large number of staff departures were – previously the exchange had incurred a large swath of outgoing personnel that has thus far not been given much of an explanation.

Perhaps most importantly, the CFTC evaluation decreed that the surveillance tools utilized by CBOE Futures and its regulatory service provider, the National Futures Association (NFA), were both more than adequate in the detection of rule violations. As such, any lingering doubts as to the level oversight of CBOE Futures’ operations possesses seems to be put to bed with the conclusion of the evaluation.

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