The National Futures Association ("NFA") submitted comments on a CFTC proposal to simplify the requirements for self-regulatory organizations ("SROs") conducting financial surveillance on futures commission merchants ("FCMs"). The comment period closed on September 4, 2018. The proposal (summarized here) would amend CFTC Rule 1.52 ("Self-Regulatory Organization Adoption and Surveillance of Minimum Financial Requirements") and is a response to public feedback indicating that current regulations regarding FCM surveillance requirements are burdensome.
NFA expressed support for CFTC Rule 1.52's objective of "strengthening and enhancing the FCM supervisory program in order to minimize the chances that an FCM engages in unlawful activities." NFA stated, however, that it does not see the benefit of consulting an examination expert every three years to carry out a review of the application of the program. In particular, NFA asserted that the scope of the review may be beyond the expertise of the examinations expert.
Additionally, NFA recommended that the CFTC amend Rule 1.52 to "eliminate the set time period or specify that the Director of [the Division of Swap Dealer and Intermediary Oversight] has the authority to provide the SROs with relief from engaging the examinations expert at the end of a five-year time frame."
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