The Commodity Futures Trading Commission has announced new guidance clarifying the factors that will be considered in the evaluation of compliance programs in connection with CFTC enforcement. The guidance, issued on September 10, 2020 by the CFTC’s Division of Enforcement, describes three prongs of the regulator’s inquiry regarding compliance programs: whether the program is reasonably designed and implemented to (1) prevent the misconduct, (2) detect the misconduct, and (3) remediate the misconduct. The guidance lists the factors to be taken into consideration in evaluating the ability of a compliance program to prevent misconduct:
• The organization’s written policies and procedures
• Adequate resources
• Staff training
• Any failures to remedy previously identified deficiencies
• The structure and oversight of the compliance function
Other factors that may be taken into consideration by the CFTC are remediation measures, and whether these have effectively addressed the impact of the misconduct, disciplined the individuals responsible, and addressed deficiencies in the compliance program.