CFTC Sanctions FCM for Supervision Violations

CFTC filed and settled charges against a registered Futures Commission Merchant ("FCM"), for failing to provide and maintain an adequate program of supervision and for failing to diligently supervise its employees.

The CFTC Order found that from at least 2008 until May 2013, the FCM did not have adequate policies or procedures governing the transfer of positions between customers' accounts, and no set written policy governing a request by a customer to transfer positions between accounts.

According to the CFTC, the FCM had an "unwritten policy such that its employees understood that they were to seek guidance if a transfer was requested between two accounts that were not under common control." The CFTC contended in the Order that the unwritten policy did not provide "specific guidance regarding the impact of beneficial ownership on account transfers." Therefore, the CFTC found that the FCM had violated CFTC Rule 166.3, requiring adequate supervision.

See: CFTC Order; CFTC Press Release.