On February 12, 2019, DSIO was among the CFTC’s Divisions to publish its Examination Priorities for 2019. DSIO’s Exams primarily focused on protecting customer funds.
DSIO’s Examinations Branch is primarily responsible for overseeing derivative markets intermediaries, including futures commission merchants, swap dealers, major swap participants, commodity pool operators, commodity trading advisors, introducing brokers and retail foreign exchange dealers.
The core focus of DSIO Exams is the protection of customer funds. Examinations Branch resources are primarily focused on the oversight of approximately 65 FCMs, which are the only registrants permitted by regulation to hold listed derivative customers’ funds. The team also performs limited oversight responsibilities for approximately 100 SDs.
DSIO’s Compliance Branch 2019 Examination Priorities include:
- withdrawal of residual interest from customer accounts;
- accepted forms of non-cash margin;
- compliance with segregation requirements;
- FCM use of customer depositories;
- FCM customer account documentation; and
- SD/MSP relationships with third-party vendors.
DSIO Exams will continue to conduct its series of routine functions to constantly monitor the activities of CFTC registrants including, but not limited to, reviewing notices, risk management programs, financial statement filings, risk exposure reports, risk assessment reports, and chief compliance officer annual reports.
CFTC Chairman J. Christopher Giancarlo statement on the 2019 Examination Priorities:
“I commend DMO, DSIO and DCR leadership and staff for their work to bring additional transparency into the CFTC agenda in order to ensure that registered market participants devote adequate compliance resources consistent with our regulatory priorities. This first-ever publication of division examination priorities is in line with Project KISS and other agency initiatives to improve the relationship between the agency and the entities it regulates, while promoting a culture of compliance at our registrants.”
See press release 7869-19 (February 12, 2019) for CFTC Divisions 2019 Examination Priorities.