The Commodity Futures Trading Commission has notified ICE Futures US of the results of a rule enforcement review completed by the commission's division of market oversight. The division assessed the exchange's compliance with new Core Principle 13, relating to the exchange's disciplinary programme.
The division found that the exchange maintains an adequate disciplinary programme. The exchange has the authority to investigate potential rule violations, prosecute cases, and discipline members who are found to have violated exchange rules. The division found that the exchange maintains a small but highly experienced staff in its compliance department. The division believes that the number of compliance personnel was sufficient for enforcement purposes during the target period.
Although the division believes that the exchange maintains an adequate disciplinary program, the division identified certain areas in which the exchange needs to make improvements.
The division recommended that:
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the exchange should keep written records of any recommendation made by compliance to a disciplinary subcommittee regarding a settlement offer;
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furthermore, if compliance recommends a lesser sanction to a disciplinary subcommittee than compliance recommended at an earlier stage of an investigation, the exchange’s records should explain why compliance determined the lesser sanction is now appropriate;
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in cases of violative conduct by employees of a firm with trading privileges on the exchange, the exchange should conduct thorough interviews with relevant employees to determine the scope of involvement by employees and, potentially, by management;
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the exchange should enter into settlement negotiations only after interviewing all relevant employees and conducting a thorough investigation;
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the exchange should reduce the average time between the completion of an investigation report and the referral of the case to the exchange’s business conduct committee; and
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the exchange should record the date in investigation reports on which the reports are approved by senior compliance staff.
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