Newedge has urged the US Commodity Futures Trading Commission to reconsider proposed rules that would place what it calls an “unreasonably disproportionate burden” of responsibility on chief compliance officers.

One of the less-noticed parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July, was its insistence that swap dealers, major swap participants and futures commission merchants appoint a chief compliance officer (CCO), reporting to the board or a senior executive.

CCOs must set compliance policies and ensure adherence to them, resolve conflicts of interest, enforce observance of the Commodity Exchange Act and CFTC rules, identify breaches and create procedures for remedying them.

Each CCO must prepare, sign and certify an annual report detailing compliance policies and activities.

Gary De Waal, Newedge’s group general counsel, wrote to the CFTC in January, saying the firm supported global efforts to enhance compliance, but had concerns.

It believes that, under section 17 of the Dodd-Frank Act, there should be separate rules for FCMs from those for swap dealers and major swap participants.

The burden of developing and enforcing all compliance rules would be great, De Waal said, and would oblige the CCO to oversee all areas, though he or she might not be familiar with all of them.

A more effective system, he argued, would be for the CFTC to let firms divide compliance tasks more evenly and dependent on skills. CCOs should have lesser responsibilities, fulfilling more of an overview role, he contended – and the “front office” should be responsible for resolving conflicts of interest.