CFTC Oversight Division Concludes Evaluation of CBOE Futures’ Transparency

The US Commodity Futures Trading Commission’s (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) has issued the results of a rule enforcement review of the CBOE Futures Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, 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.

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.