New NFA Notice Provides Cybersecurity Guidance to Futures and Derivatives Market

Cybersecurity in the futures and derivatives market is “perhaps the single most important new risk to market integrity and financial stability,” according to Commodity Futures Trading Commission Chairman Timothy Massad.  The National Futures Association (NFA), a self-regulatory organization responsible for the registration of certain market participants, recently received approval from the CFTC of its Interpretive Notice to several existing NFA compliance rules.  The new guidance will provide more specific standards for supervisory procedures and will require NFA members to adopt and enforce written policies and procedures to secure customer data and electronic systems.  “The approach of the Interpretive Notice is to tie cybersecurity best practices to a firm’s supervisory obligations,” Stephen Humenik, a Covington & Burling partner, told Cybersecurity Law Report.  See also “Debunking Cybersecurity Myths and Setting Program Goals for the Financial Services Industry,” Cybersecurity Law Report, Vol. 1, No. 2 (Apr. 22, 2015).

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