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Futures Markets: Strengthening Sales Practice Oversight

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Report Type Reports and Testimonies
Report Date April 25, 1991
Report No. GGD-91-41
Subject
Summary:

GAO evaluated the Commodity Futures Trading Commission's (CFTC): (1) oversight of self-regulatory organizations' (SRO) compliance with sales practice requirements; and (2) monitoring of SRO sales practice audits.

GAO found that: (1) CFTC oversight of futures industry sales practices needed to be strengthened to provide investors with additional protection against sales practice abuses; (2) rule enforcement reviews (RER) provided only limited coverage of sales practice requirements and could be better planned and documented; (3) CFTC recommendations made as a result of RER were not always implemented or resolved; (4) CFTC did not regularly collect data on SRO audit compliance and results; (5) CFTC did not enforce existing audit requirements, resulting in gaps in audit coverage; (6) SRO audit guidelines were incomplete; and (7) the futures industry required full disclosure of commissions and fees, but did not regulate them.

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