The CFTC simultaneously filed and settled charges against a commodities trading and distribution company for failing to file timely CFTC Form 304 reports concerning its call cotton purchases and sales when it held or controlled at least 100 cotton futures positions. Form 304 requires cotton merchants and dealers who hold or control reportable cotton futures positions to report their call cotton purchases and sales on a weekly basis pursuant to Regulations 19.00(a)(2) and 19.02.
The CFTC Order found that on approximately 22 occasions, the company held or controlled at least 100 cotton futures but failed to file required Form 304 reports weekly. The CFTC ordered the company to (i) pay a $150,000 civil monetary penalty, and (ii) adopt and maintain internal controls reasonably designed to ensure that the agents and employees under the company's authority and control comply fully with the CFTC cotton reporting regulations, including, but not limited to, designating a specific individual or individuals to be responsible for filing CFTC Form 304 reports. The provisions of the order became effective on July 11, 2016.
The CFTC noted that it issued a May 8, 2013 Market Advisory to remind cotton market participants that, regardless of their location, they have an ongoing obligation to comply with applicable reporting obligations in a timely manner.
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