March 2, 2020

FIA Urges CFTC to Amend Audit Trail Requirements

The FIA Law & Compliance Audit Trail Working Group urged the CFTC to amend certain audit trail requirements. In general, the recommendations are intended to eliminate "non‐value‐adding work," and reduce the retention of multiple redundant copies of audit trail records.

At a CFTC Technology Advisory Committee meeting, the FIA Audit Trail Working Group recommended modifying:

  • CFTC Rule 38.553 ("Enforcement of audit trail requirements") by no longer mandating that Designated Contract Markets ("DCMs") conduct annual audit trail reviews; and

  • CFTC Rule 38.552 ("Elements of an acceptable audit trail program") by eliminating elements of what constitutes an "adequate transaction database."

In addition, the FIA Working Group stated that while they are proposing modifications to CFTC Rule Part 38 relating to audit trail requirements for DCMs, they are not proposing modifications to CFTC Rule 1.31 ("Regulatory records; retention and production") or Rule 1.35 ("Records of commodity interest and related cash or forward transactions") regarding certain recordkeeping requirements.