CFTC Announces Fifth Series of Dodd-Frank Rulemakings


The Commodity Futures Trading Commission has requested comments on the following five rule proposals to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Segregation of Customer Funds Relating to Cleared Swaps:

Section 724 of the Dodd-Frank Act requires the CFTC to promulgate new rules concerning the segregation and protection of the collateral of swaps customers of futures commission merchants (FCMs). The CFTC is requesting information concerning the costs and benefits of various models for such segregation and protection requirements both at individual entities and across the industry. In particular, the CFTC is considering a range of models, including: (1) a model requiring individual segregation of each customer’s collateral at all levels (at the FCM, the clearinghouse and at each custodian); (2) a model in which collateral of multiple customers may be commingled, but the value of the collateral for each customer’s positions is treated on an individual basis; (3) a model in which the collateral of non-defaulting customers may be used in the event of an FCM default, but only after other elements of the clearinghouse’s default resources package, including the clearinghouse’s own contribution and the clearing member-funded guarantee fund; and (4) the current futures model, which treats an FCM’s customers on an omnibus basis. Comments on these proposed rules must be submitted within 45 days of the proposal’s publication in the Federal Register.

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