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CFTC issues guidance for enhanced oversight of cryptocurrency futures trading

Markets trading cryptocurrency futures contracts will be required to enhance their oversight of trade activity, work more closely with federal regulators and increase reporting for larger trading volume under guidance issued Monday by the CFTC.

Market surveillance will include real-time monitoring by designated contract markets and swap execution facilities of a broader range of trade data for cryptocurrency futures, including trader identification, prices, volumes, trade time stamps and quotes, according to the guidance.

The Commodity Futures Trading Commission also suggested that higher levels of trade reporting could be required for trades at five bitcoin or above, the guidance said.

The guidance does not change the self-certification process for new cryptocurrency and other futures contracts, as was used when CME Group and Cboe Global Markets filed product certifications with the CFTC to offer bitcoin derivatives.

"CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products," said Brian A. Bussey, director of the CFTC's division of clearing and risk, in an accompanying news release. "In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products."

The full guidance is available on the CFTC's website.