December 7, 2016
Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) announced today that it has issued the results of a rule enforcement review of ICE Futures U.S. (ICE or Exchange). The review, which covered a one-year target period, evaluated the Exchange’s compliance with elements of Designated Contract Market Core Principles 2 (Compliance With Rules) and 12 (Protection of Markets and Market Participants). The Division found that ICE has an adequate trade practice surveillance program, subject to three recommendations and one deficiency, as summarized below.
The Division made recommendations concerning the Exchange’s proactive reviews for trade practice violations (trade practice reviews), its automated trade surveillance system, and trade practice investigations. The Division recommended that the Exchange conduct and document all trade practice reviews.
Although the Division found that the Exchange’s automated surveillance system was otherwise adequate, the Division recommended that the Exchange retain or have the capability to replicate the parameters used to generate trade practice exception report alerts produced by the system. The Division also recommended that trade practice investigations be expanded as appropriate to look for patterns of abuse (e.g. by examining trading occurring on other days), and that such expansions be documented.
The Division found that the Exchange was deficient with respect to its compliance with Commission regulation 38.158(b), which requires that the Exchange complete investigations in one year or less, absent mitigating circumstances.
The report is available on the CFTC’s website at ICE 2016 Trade Practice RER. Printed copies are also available at CFTC’s Office of Public Affairs, Three Lafayette Centre, 1155 21st Street N.W., Washington, DC 20581.
Last Updated: December 7, 2016