CME rebuked by regulators over compliance staff levels
16 September 2010 | 6091 views | 0
US futures regulators have upbraided the Chicago Mercantile Exchange and Chicago Board of Trade for cutting compliance staff levels in the wake of their 2007 merger.
In a compliance review covering the 2008/09 timeframe, the oversight division of the Commodity Futures Trading Commission (CFTC) assessed the Exchanges' surveillance and disciplinary programmes.
While the Chicago markets' audit trail, trade practice and disciplinary programmes were deemed adequate, the CFTC raised concerns about compliance staff levels, which had shrunk by 18% in the wake of the merger.
"Although additional compliance staff has been hired since the end of the target period, the division recommended that the Exchanges review the compliance staff size needed," notes the regulator.
The CFTC has asked the Exchange to report back on its findings and to increase compliance staffing levels "when necessary in light of trading volume, products traded, industry changes, new responsibilities assigned to staff or other relevant developments".
The CFTC's report comes a day after the CME inadvertently placed thousands of test orders on live energy and metals markets on its electronic trading platform, throwing the markets into confusion.