On January 11, pursuant to Section 724(a) of the Dodd-Frank Act, the CFTC adopted a final rule regarding the protection of cleared swaps and collateral belonging to cleared swaps customers of futures commission merchants (FCMs). The CFTC adopted the Legally Segregated Operationally Commingled Model (LSOC Model, or Complete Legal Segregation Model), which provides that: (i) pre-bankruptcy, cleared swaps collateral of all FCM cleared swaps customers may be kept together in one account, but the FCM’s own property must be kept segregated and (ii) post-bankruptcy, the collateral of one cleared swaps customer may not be used to cover the obligations of another cleared swaps customer or the FCM. CFTC Release. CFTC Final Rule.