CFTC Delegates Systems Safeguards Reporting Authority to Staff

The CFTC adopted a final rule that will establish a new delegation of authority for notifying designated contract markets ("DCMs") of their percentage of total annual trading volume among all DCMs and whether they will be a "covered DCM" under CFTC Rule 38.1051.

Under CFTC Rule 38.1051 (System Safeguards), DCMs are required to provide the CFTC with their annual total trading volume by January 31 of each year. By February 28, the CFTC must then inform DCMs what their percentage of total trading volume among all DCMs is. If the trading volume percentage is greater than or equal to 5%, the DCM is considered a "covered DCM." This designation imposes additional requirements for cybersecurity testing and use of independent contractors.

The rule will delegate this authority to the Director of the Division of Market Oversight and designated staff. The CFTC filed the rule to become effective upon publication in the Federal Register.