The Division found that the Exchange maintained adequate audit trail, trade practice surveillance and disciplinary programs. Comex conducted thorough and well documented order ticket and trading card reviews which indicated high rates of member compliance with trade recordation requirements. The Exchange also developed thorough and well documented investigations of possible trade practice violations and conducted appropriate investigative analyses. In addition, the Exchange undertook significant and successful efforts to close older investigations and ensure the timeliness of ongoing investigations. Comex also handled disciplinary proceedings in a timely manner, and imposed penalties that appear reasonable relative to the conduct being sanctioned. To further improve Comex's self-regulatory programs, the Division recommended that the Exchange increase the number of floor brokers reviewed annually in routine floor order ticket reviews, and reexamine its program of automated trade practice surveillance, making modifications necessary to increase the number of investigations generated.
The Exchange will have 60 days to respond in writing to the Division's recommendations. Copies of the report are available from the Commission's Office of Public Affairs, Three Lafayette Centre, 1155 - 21st Street N.W., Washington, DC 20581, (202) 418-5080, or by accessing the Commission's website at www.cftc.gov.
