CFTC Releases Rule Enforcement Review of North American Derivatives Trading Exchange Inc.

The CFTC has released the results of a rule enforcement review completed by the Division of Market Oversight ("DMO") evaluating the North American Derivatives Trading Exchange Inc.'s ("Nadex") compliance with Core Principles 2 (Compliance with Rules) and 12 (Protection of Market Participants), which relate to an exchange's trade practice surveillance program. Nadex is a specialized exchange that trades binary options and bull spreads.

The DMO found that Nadex maintains an adequate trade practice surveillance program, including adequate staff, systems, investigatory work and sanctions, but also pointed out where Nadex should improve its trade practice program. Among other items, the DMO recommended that Nadex improve the recordkeeping of its investigation logs and investigation memoranda.

See: Rule Enforcement Review of the North American Derivatives Exchange.