2025 Compliance Outlook

Contributed by: Joe Schifano, Global Head of Regulatory Affairs at Eventus I. Introduction As the new Trump administration takes office in 2025, it brings a shift in leadership across federal regulatory and enforcement agencies, notably the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Department of Justice (DOJ). In the short term, market commentators predict that this transition may affect the scope and intensity of enforcement actions, as the administration could prioritize deregulation and scale back certain investigations and prosecutions. However, Introducing Brokers (IBs) and Commodity Trading Advisors (CTAs) must not become complacent. Enforcement priorities can shift quickly, and a future administration or even a change in leadership within the same administration might re-energize oversight and compliance requirements. Maintaining robust compliance programs is therefore a prudent strategy, particularly because technology and best practices are evolving rapidly. Indeed, compliance departments are under dual pressures: they may see reduced agency scrutiny for a period, but they must continue to adopt new innovative tools—such as automation, large language models (LLMs), natural language processing (NLP), and other forms of machine learning—to remain effective and prepared for regulatory exams in the months and years ahead. II. Changing Enforcement Landscape 1. Leadership Changes and Shifting Regulatory Focus Under a new administration, the heads of the SEC, CFTC, and DOJ will likely be replaced with individuals aligned with the President’s policy goals. Such leadership transitions can lead to a period of reorientation for enforcement divisions. For example, the SEC may emphasize capital formation over enforcement, while the CFTC could pivot resources away from certain market manipulation probes as it spends more time with digital assets. Yet, history shows that even when agencies appear lenient, staff-level investigations continue, and cases can resurface when priorities again shift. That was certainly true during the first Trump administration which coincided with the resolution of many high-profile spoofing matters. 2. Long-Term Ramifications Market commentators warn that IBs and CTAs should remain vigilant despite any perceived near-term regulatory laxity. Any lull in enforcement may be temporary, and a sudden surge in enforcement actions could occur if the political winds change or if there is public or congressional pressure to crack down on financial sector misconduct. Additionally, the National Futures Association (NFA), as a self-regulatory organization, is not solely dependent on political leadership changes. The NFA’s ongoing mission to uphold industry standards means that audits and enforcement efforts continue apace, even in times of broader regulatory shift. III. Core Compliance Issues for 2025 1. Trade Surveillance and Recordkeeping For NIBA members, a cornerstone of compliance remains robust trade surveillance. Agencies like the CFTC and SEC have, over the past decade, increased expectations for electronic monitoring, algorithmic oversight, and comprehensive record retention. Although a new administration might temporarily lighten certain enforcement efforts, the rules themselves remain intact. Violations like improper trade allocations, spoofing, or front-running still carry severe penalties. Modern surveillance platforms will continue to advance by incorporating automation and machine learning to detect anomalous trading patterns. As budgets tighten or shift, compliance officers may look to cost-effective, AI-driven systems that reduce manual oversight tasks. Early adopters have noted improved detection rates and fewer false positives, though regulators have stressed that technology must supplement, not replace, human judgment. 2. Data Governance Data governance has emerged as a top priority for IBs, CTAs, and regulators alike. This focus isn’t just about proper recordkeeping—it also encompasses how firms capture, aggregate, validate, and supervise massive amounts of trade and communication data. While this has triggered a bit of panic for firms, regulators expect them to move toward stable, well-documented governance frameworks. Recent high-profile fines underline the consequences of inadequate data retention policies and unauthorized off-channel communications. The lesson is clear: sound data governance and trade surveillance processes must handle everything from front-office trading platforms to staff messaging apps. By mapping and validating data flows, deploying automated tools for real-time oversight, and maintaining consistent policies across teams, firms can reduce the risk of regulatory sanctions and improve overall compliance. Successful organizations are evolving from “panic” to “progress” by investing in robust systems and cross-functional collaboration—ensuring data integrity and regulatory alignment remain strong in any enforcement climate. 3. Cybersecurity and Data Protection Cybersecurity remains a high priority across federal agencies, in part because cyber threats transcend political agendas. The NFA and CFTC specifically require registrants to maintain written policies that address cyber risk, including incident response plans and data breach protocols. With the proliferation of remote work and cloud-based trading solutions, IBs and CTAs must ensure robust, documented controls. Beyond traditional firewalls and anti-malware, many firms are exploring artificial intelligence to identify suspicious network behavior. Regulators are increasingly receptive to AI-based solutions that can actively learn from attacks and adapt countermeasures in real time. 4. AML and KYC Considerations Anti-Money Laundering (AML) and Know Your Customer (KYC) rules remain cornerstones of financial services regulation. Under the Bank Secrecy Act (BSA) and associated FinCEN regulations, IBs and CTAs are held responsible for identifying suspicious transactions and reporting them promptly. Even if an administration signals “softer” enforcement, the reputational and legal risks of non-compliance are significant. Advanced screening algorithms can rapidly compare trading patterns against known risk profiles and sanction lists. The trend toward automation can help smaller compliance teams cope with the volume of data without sacrificing accuracy or speed. IV. Examination Expectations and Best Practices 1. Short-Term vs. Long-Term Planning While day-to-day enforcement might change, regulators conduct periodic examinations that can unearth historical compliance lapses. The NFA, for instance, is known for rigorous audits focusing on adequate supervision, risk management, and recordkeeping. Consistent vigilance and documentation remains critical. 2. Leveraging Emerging Technologies The balancing act for compliance departments is to remain cost-effective while meeting rising data and monitoring demands. Innovative tools, including machine learning, large language models (LLMs) and NLP-based solutions, can streamline tasks such as policy drafting, review of trading communications, and even the review of market surveillance alerts. Note, while advanced technologies promise efficiency, they also require thorough validation to avoid regulatory missteps. Regulators increasingly expect firms to demonstrate that AI tools are accurate, auditable, and free from biased assumptions that could cause compliance blind spots. 3. Continuous Training and Culture of Compliance As new employees join and regulatory policies evolve, ongoing training is essential. A compliance culture that integrates technology with knowledgeable human oversight is more resilient to leadership changes at the agency level. Regular, well-documented training ensures staff remain up to date on the latest rules and potential enforcement pitfalls. V. Conclusion Despite a presumed change of enforcement priorities under the new Trump administration, IBs, CTAs, and all NIBA members should plan for the long term. Regulatory changes can be sudden, and a shift in leadership or political priorities could reinvigorate enforcement. Compliance vigilance is not only about avoiding fines or suspensions; it is a key aspect of maintaining trust with clients, counterparties, and the broader market. Now is the time to invest strategically in compliance technology—trade surveillance platforms, AI-driven AML monitoring, and NLP-based data review—to manage the ever-increasing complexity of trading environments. Combining these tools with robust training, strong internal governance, and a forward-looking compliance strategy will help firms weather potential fluctuations in regulatory intensity. By staying adaptable and prepared, IBs and CTAs can successfully navigate the evolving 2025 landscape and beyond.

2025 Compliance Outlook

Stay Informed