CME Group’s MRAN (RA2403-5)
The CME Group’s new Market Regulation Advisory Notice (RA2403-5), in effect as of July 16, 2024, emphasizes the importance of training as part of its expectations for firms’ supervisory duties. The MRAN provides detailed FAQ explanations for its enhanced training expectations and outlines other key factors that Market Regulation will assess when determining potential violations of Rule 432.W (“General Offenses”).
According to CME’s MRAN, “Market Regulation has taken disciplinary actions on supervisory failures including, but not limited to, the failure to diligently, adequately, effectively, or sufficiently … provide training to employees designed to prevent potential violations of Exchange rules.”
Effective supervision requires more than just policies—it demands comprehensive training tailored to your team’s specific Exchange-related activities. It emphasizes the need for effective supervisory programs to prevent, detect, and correct potential rule violations. This includes educating employees and agents on Exchange-specific rules, amendments, and disciplinary actions, as well as maintaining thorough records of training attendance and communications.
Training Expectations Aross Exchanges: ICE and CME
While the CME Group’s recent Market Regulation Advisory Notice (RA2403-5) raises the bar on training expectations, it’s important to note that the Intercontinental Exchange (ICE) has had a similar training requirement in place for years. In ICE’s 2019 guidance on the Duty to Supervise, the exchange stressed the necessity of training individuals on ICE’s specific rules. In fact, ICE has repeatedly brought “failure to supervise” charges in disciplinary cases, demonstrating that firms must ensure traders and personnel are thoroughly trained on the exchange’s requirements – including a couple of cases last week where ICE sanctioned a firm more than $5 million in disgorgement and fines. With the CME now catching up—if not surpassing—ICE’s stance, it is clear that robust and targeted training is crucial for regulatory compliance at both exchange groups.
How We Can Help
Enhance your team’s readiness for both ICE and CME regulations with our Market Conduct and Noncompetitive Trading courses. We provide comprehensive coverage of both ICE and CME rules and disciplinary cases regarding essential topics like Supervisory Responsibilities, Trade Practice Requirements, Cross Orders, Block Trading, EFRPs, and more. Our training helps equip your team to avoid common supervisory pitfalls and minimize the risk of disciplinary actions.
