CFTC publishes final rule requiring records of derivatives traders’ oral communications

cftc1The CFTC recently published its final rule requiring certain futures and swaps market participants to keep records on all oral communications related to trading, bids and quotes in the Federal Register.

The CFTC voted on Dec. 17 to require derivatives traders to keep records of commodities transactions, Bloomberg reports.

“The rule will make enforcement investigations more efficient by preserving critical evidence that otherwise may be lost to memory lapses and inconsistent recollections,” Gary Gensler, the chairman of the CFTC, said, according to Bloomberg. “The commission will have access to evidence of fraud and market manipulation, which is expected to increase the success of enforcement actions for the benefit [of] customers, market participants and the markets.”

Additionally, the agency revised the rules to reduce the impact on smaller brokers and backed away from requiring records of oral communications related to trading in grains.

The agency delayed consideration of the rule amid opposition from industry groups, including the Commodity Markets Council and National Grain and Feed Association, both of which said that the proposed rules would include commercial end-users trading to hedge risk, Bloomberg reports.

The rule will take effect Feb. 19.

The CFTC used telephone call recordings in its investigation of Barclays that led to a $200 million settlement over claims that the bank attempted to manipulate Libor, a key interest rate.

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