CFTC Orders ICE to Pay Civil Monetary Penalty for Recurring Data Reporting Violations

The CFTC issued an order to file and settle charges against ICE Futures U.S., Inc. (“ICE”), a designated contract market (“DCM”), for submitting inaccurate and incomplete data and reports to the CFTC.

In addition to imposing a $3 million civil monetary penalty, the CFTC ordered ICE to improve its regulatory reporting. These improvements include (i) the creation and maintenance of the new senior position of Chief Data Officer (the appointee will be directly responsible for systems and procedures relating to regulatory reporting), and (ii) the hiring of at least three additional members of its quality assurance staff to be dedicated to regulatory reporting.

Pursuant to Part 16 of the Rules, a DCM is required to submit certain trading and market-related reports and data to the CFTC. According to the CFTC order, on every reporting day during a 20-month period, ICE submitted reports and data containing errors and omissions, their cumulative inaccuracies totaling in the thousands. Additionally, the order found that even though the CFTC staff notified ICE of the problems repeatedly and requested action to correct the mistakes, ICE continued to submit inaccurate reports and data.

Lofchie Comment: Given the overwhelming recordkeeping and reporting requirements to which firms and not just exchanges have become subject, large firms at the very least might want to create Chief Data Officer positions. The person in such a role would not only develop expertise with a firm’s technology and how/where to find data within it, but also serve as a point of contact for regulators who request information.