Release Number 8090-19

December 4, 2019

DSIO Issues Advisory Providing Guidance and Staff Recommendations for Chief Compliance Officer Annual Report Preparation

— The U.S. Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today issued an advisory that addresses the preparation of the Chief Compliance Officer (CCO) Annual Report for futures commission merchants, swap dealers, and major swap participants.

“Clarity is one of the CFTC’s core values, and this advisory details what the Division expects to see in our registrants’ CCO Annual Reports,” said DSIO Director Joshua Sterling. “Providing guidance to its registrants is one of DSIO’s five core building blocks, along with examination, reporting, enforcement coordination, and rulemaking programs. These building blocks allow DSIO to operate world-class oversight programs as part of the CFTC’s vision to be the global standard for sound derivatives regulation. At the same time, we are continuing to take a careful look at how swap dealers are complying with all of their requirements under Dodd-Frank and to understand the root causes and remediation efforts when firms come up short.”

The advisory addresses a number of areas of the CCO Annual Report, including: 1) areas for improvement; 2) material non-compliance issues; 3) financial, managerial, operational, and staffing resources; 4) the certification requirement; 5) furnishing the annual report; and 6) other related matters.

These staff recommendations and guidance follow the publication of a CFTC Final Rule and Guidance in August of 2018 modifying the CCO Annual Report requirements.

“The advisory will help CCOs comply with their regulatory requirements and provide the necessary information to the CFTC in an efficient and useful manner,” said DSIO Associate Director Amanda Olear, who led the agency’s effort to create this guidance. “The CCO Annual Report is an important tool for DSIO to assess its registrants and it is critical that the reports contain the information necessary to fulfill that need.”