Market Abuse / Surveillance in United States

What Changed

The primary regulatory modification addresses a single-day exception to standard options exercise procedures: CEA Cut-Off Time Acceleration: The normal 5:30 p.m. ET deadline for submitting Contrary Exercise Advice was compressed to 10:00 a.m. ET on January 9, 2025. Exercise Instruction Acceptance Window: Members could not accept exercise instructions for either customer or non-customer accounts after 10:00 a.m. ET on that date. OCC Processing Unchanged: The Options Clearing Corporation's proc

What You Need To Do

• *Update Internal Procedures
• *System Configuration
• *Staff Communication
• *Customer Notification
• *Submission Coordination

Key Dates

References

• [1] finra.org
• [2] finra.org
• [3] finra.org
• [4] finra.org
• [5] finra.org
• [6] finra.org
• [7] finra.org
• [8] sec.gov

What Changed

National options exchanges will close at 1:00 p.m. ET on November 28, 2025, triggering a modified exercise cut-off under FINRA Rule 2360(b)(23)(A)(viii): deadline is 1 hour 30 minutes after close (i.e., 2:30 p.m. ET), overriding the standard 5:30 p.m. ET. Firms may set earlier internal deadlines for accepting exercise instructions but cannot accept any after 2:30 p.m. ET per FINRA Rule 2360(b)(23)(A)(vi). Reiterates standard procedures: in-the-money options auto-exercise under OCC Rule 805 (Exer

What You Need To Do

• Update client communications
• Configure systems and procedures
• Train staff
• Monitor and record
• Contact FINRA contacts (James Turnbull or Matthew Vitek) for clarification

Key Dates

References

• [1] finra.org
• [2] davispolk.com
• [3] finra.org
• [4] gtlaw.com
• [5] mayerbrown.com
• [6] finra.org
• [7] sec.gov
• [8] carltonfields.com

What Changed

The enforcement actions establish precedent in three critical areas: *Market Manipulation (Spoofing): The CFTC secured consent orders against precious metals futures traders for spoofing—placing and canceling orders to create false market impressions. The orders impose three-year and six-month trading bans** and require cease-and-desist compliance with the Commodity Exchange Act's spoofing prohibition. *Misappropriation and Fictitious Trading: The CFTC obtained permanent injunctive relief requ

What You Need To Do

• *For Registered Futures Firms and Banks
• trade and post-trade compliance controls
• *For Commodity Pool Operators and Investment Advisors:
• by-jurisdiction licensing analyses before soliciting investors
• *For All Market Participants

Key Dates

References

• [1] cftc.gov
• [2] jdsupra.com
• [3] cftc.gov
• [4] foley.com
• [5] lowenstein.com
• [6] cftc.gov
• [7] cohenco.com
• [8] cftc.gov

What Changed

The CFTC has obtained federal court orders imposing civil monetary penalties and trading bans on individuals and firms for spoofing and misappropriating confidential information. The CFTC has also charged an unregistered commodity pool operator with fraud and registration violations.

What You Need To Do

• Verify registration with the CFTC at NFA BASIC before committing funds
• Review and update anti-spoofing and anti-fraud policies and procedures
• Ensure compliance with CFTC regulations regarding commodity pool operations and futures market participation

Key Dates

Related Regulations

What Changed

This announcement reflects structural reforms rather than new substantive regulations: Replacement of Regional Directors with Deputy Directors, centralizing reporting from local offices (e.g., Boston, Fort Worth, Atlanta) and specialized units directly to headquarters-led Deputy Directors. Enhanced supervision of enforcement decisions, aiming for consistency and reduced regional variations in handling investigations. Complements parallel Wells process reforms under Chairman Paul Atkins, includin

What You Need To Do

• Review and update internal protocols for SEC investigations to align with centralized reporting structures, anticipating uniform standards across regions
• Train legal/compliance staff on refined Wells process (e
• Monitor upcoming SEC communications for Enforcement Director Judge Margaret Ryan's guidance on fraud-focused priorities
• Assess current or potential matters for earlier engagement with Deputy Directors on case theories and resolutions

Key Dates

References

• [1] jdsupra.com
• [2] dlapiper.com
• [3] mwe.com
• [4] corpgov.law.harvard.edu
• [5] foley.com
• [6] skadden.com
• [7] sec.gov
• [8] capx.cooley.com

What Changed

The final rule introduces the following substantive amendments: *Exceptions for Swaps Intended to be Cleared (ITBC Swaps)** Swap dealers and major swap participants are exempted from certain External Business Conduct Standards and swap trading relationship documentation requirements when executing swaps that are intended by the parties to be cleared contemporaneously with execution. Such swaps are deemed void if rejected from clearing. *Prime Broker Arrangement Exemptions** Swaps executed purs

What You Need To Do

• *Immediate Actions (Pre-Implementation)
• *Implementation Actions (Upon Effective Date)
• trade disclosure systems to remove PTMMM generation and delivery requirements
• based operations, review implications of superseded Staff Letter No
• *Ongoing Compliance

Key Dates

References

• [1] cftc.gov
• [2] cftc.gov
• [3] isda.org
• [4] gibsondunn.com
• [5] sifma.org
• [6] skadden.com

What Changed

This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reinforces longstanding CEA and CFTC rules on: Mandatory registration as a Commodity Pool Operator (CPO) and Associated Persons (APs) for pools trading commodity futures (CFTC Regulation 4.13 exemptions do not apply here due to fraud and public solicitation). Prohibitions on fraud, misrepresentations, guarantees of profit, non-disclosure of risks, commingling funds, and operating pools as

What You Need To Do

• Verify registration
• Implement controls
• Conduct due diligence
• Train staff
• For SEC-registered advisers

Key Dates

References

• [1] cftc.gov
• [2] cftc.gov
• [3] sidley.com
• [4] ropesgray.com
• [5] cftc.gov
• [6] haynesboone.com
• [7] cftc.gov
• [8] alston.com

What Changed

This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements. It reaffirms existing CEA prohibitions on fraud, including Section 6(c)(1), 7 U.S.C. § 9(1), and 17 C.F.R. § 180.1(a)(1)-(3), covering material misrepresentations, omissions, and deceptive schemes in precious metals sales. Key takeaways include joint-and-several liability for entities and controlling individuals (Ikahn held liable for not acting in good faith), systematic overcharges as fraud

What You Need To Do

• Conduct immediate fraud risk assessments on precious metals sales scripts, disclosures, and pricing markups to ensure no material misrepresentations or undisclosed overcharges
• Enhance senior investor protections, including suitability reviews, cooling-off periods, and training on vulnerable customer targeting bans
• Review controlling person policies for good faith oversight, documenting supervisory failures to avoid personal liability
• Audit parallel SEC/CFTC exposures in commodity-linked activities, preparing for offset calculations in multi-agency actions
• Update compliance manuals with this case as precedent for CEA fraud in physical commodities; monitor whistleblower notices for internal reporting incentives

Key Dates

References

• [1] cftc.gov
• [2] cftc.gov
• [3] whistleblower.gov
• [4] oag.maryland.gov
• [5] nasaa.org
• [6] cftc.gov
• [7] securities.utah.gov
• [8] finance.idaho.gov

What Changed

This is an enforcement action, not a rulemaking, so there are no new regulatory changes or requirements introduced. It reaffirms existing prohibitions under CEA Section 6(c)(2) against wash sales (fictitious sales) and non-competitive transactions that negate risk or price competition in futures markets. The case highlights CFTC's interpretation of wash sales as including trades where buy and sell orders for identical quantities of the same contract are executed near-simultaneously for accounts

What You Need To Do

• Enhance trade surveillance
• Conduct gap analysis
• Strengthen internal controls
• Self-reporting consideration
• Training and recordkeeping

Key Dates

References

• [1] cftc.gov
• [2] cftc.gov
• [3] mayerbrown.com
• [4] phoenixstrategy.group
• [5] paulhastings.com
• [6] cftc.gov
• [7] figment.io
• [8] coincenter.org