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Futures Group to Help CBOE Unit

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CHICAGO (–The National Futures Association announced that it has reached an agreement with the CBOE Futures Exchange, a wholly owned subsidiary of the Chicago Board Options Exchange, by which the NFA will provide regulatory services to CFE.

In a joint statement by the NFA and CFE Wednesday [March 15], the two entities said the NFA’s services would involve trade practice and market surveillance.

Daniel J. Roth, NFA president, said that the NFA looks forward to providing these services. “We welcome this opportunity for NFA to utilize its unparalleled regulatory expertise and systems in the futures industry,” he said in the statement.

A spokeswoman for the NFA said Thursday that the agreement would take effect some time in the second quarter, although she couldn’t be more specific because she said there are still some technical issues to be addressed.

In another development, the NFA’s assistant general counsel, Carol A. Wooding, recently commented on proposed rules relating to due diligence programs for certain foreign accounts–rules issued by the U.S. Treasury’s Financial Crimes Enforcement Network.

She wrote that the NFA supports the risk-based approach of the proposed rules, which (in her words) will allow futures commission merchants and introducing brokers to implement an anti-money laundering program “that focuses on those customers, accounts and transactions that present the most risk of involving money laundering and terrorist financing.”

She also observed that the term “correspondent account” doesn’t have any established meaning outside of the banking industry. As a consequence, she cautioned that FCMs and IBs might have difficulty applying some of the concepts in the rule to their own situation.

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Contact Bob Keane with questions or comments at [email protected].


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