Dec 05, 2019 While the United States prepared to celebrate Thanksgiving the Commodity Futures Trading Commission (“CFTC”) quietly published its annual enforcement report. The report highlighted CFTC activity for 2019. The report also showcased where the commodity interest industry’s primary regulator believes enforcement priorities and trends will be heading for calendar year 2020. 2020 CFTC Emphasis Preserving Market Integrity Protecting Customers Promoting Individual Accountability Increasing Coordination with Other Enforcement Agencies CFTC Enforcement Trends The number of actions filed by the CFTC during FY 2019 (69) marked a slight increase over those taken during the last 5 calendar years (67.5) The CFTC awarded 39% more in relief from 2018 at $1.3 billion. This was the fourth highest total in CFTC history 2019 marked the second most market manipulation cases filed by the CFTC. The highest number of cases occurred in 2018. 65 percent of all cases filed during 2019 involved charges of commodities fraud, manipulative conduct, or spoofing The CFTC filed more actions jointly with other criminal authorities than in any previous year Breakdown of 2019 Regulatory Actions Manipulative Conduct, Spoofing: 16 cases Commodities Fraud: 25 cases Misappropriation of Confidential Information, Trade Allocation Schemes, Mismarking: 4 cases Protection of Customer Funds, Supervision and Financial Integrity: 6 cases Swap Data Reporting: 7 cases Illegal Off-Exchange Contracts, Failure to Register: 1 case Other Trade Practice, Including Wash Trades, Fictitious Trades, Position Limits: 4 cases Recordkeeping and Other Reporting: 3 cases False Information to CFTC or SRO, Violation of Prior Orders: 3 cases Turnkey’s CFTC and NFA Observations For 2019 Turnkey staff noted an increased level of activity by the National Futures Association (“NFA”) with respect to audits conducted of member firms. NFA appeared to be more ambitious this calendar year with commodity trading advisors (“CTAs”), completing more scoped performance audits. The self-regulatory organization also seemed to also be more aggressive focused on Cybersecurity (“ISSP”) compliance. NFA continued its trend of requiring documentation in writing for virtually all compliance obligations. This approach has been consistent and steady over the last several years. Turnkey’s institutional clients also saw an increase in requests made directly from the CFTC for market information than in the previous twelve years of our business history. For 2020 we expect both the CFTC and NFA to continue the trends above. Each year compliance obligations grow. Keeping up with these obligations can be very difficult and time consuming. Let Turnkey Trading Partners help you to stay compliant in 2020! To further discuss your firm’s operations regarding CFTC/NFA regulatory obligations, please contact us today via (312) 324-0040 or by clicking here.