On June 28, 2018, the CFTC proposed to simplify its standards for a self-regulatory organization's financial surveillance program for futures commission merchants. The proposed amendments result from the CFTC's Project KISS initiative to simplify and modernize the Commission's regulations.
Under CFTC Regulation 1.52, a third-party examinations expert is required to evaluate an SRO's FCM supervisory program and the application of the program at least once every three years. The proposed amendments would narrow the scope of this evaluation to only consider whether the SRO's FCM examination standards are consistent with auditing standards issued by the Public Company Accounting Oversight Board. The proposal would also reduce the frequency of reviews by an examination expert, to once every five years or after the issuance of new or amended audit standards by the PCAOB that require material changes to the SRO's FCM examination standards.
Comments on the proposed amendments are due September 4, 2018.
The CFTC's press release is available at: https://www.cftc.gov/PressRoom/PressReleases/7746-18 and the proposed amendments are available at: https://www.cftc.gov/sites/default/files/2018-07/2018-14272a.pdf.
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