On August 16, the National Futures Association (NFA) approved amendments to NFA Financial Requirements that will require a futures commissions merchant (FCM) to provide its Designated SRO with view-only access via the internet to account information for each of the FCM’s customer segregated funds accounts maintained and held at a bank or trust company. Designated SROs would be able to review this information at any time against an FCM’s daily segregation report. The amendments have been sent to the CFTC for approval. NFA Release.
FCM
CFTC Amendments to Regulations Governing Investment of Customer Funds by DCOs and FCMs
On December 5, the CFTC adopted amendments to Regulation 1.25 and Regulation 30.7, which govern the investment of customer and secured amount funds by derivatives clearing organizations (DCOs) and futures commission merchants (FCMs). The amendments address: (i) changes to the list of permitted investments, including the elimination of foreign sovereign debt and in-house transactions; (ii) a clarification of the liquidity requirement; (iii) the removal of rating requirements; and (iv) an expansion of concentration limits including asset-based, issuer-based, and counterparty concentration restrictions. The rule will be effective 60 days after the date of publication in the Federal Register. CFTC Q&A. CFTC Final Rules.
CFTC Proposed Rule on Protection of Cleared Swaps Customer Contracts and Collateral
On April 27, pursuant to Section 724(a) of the Dodd-Frank Act, the CFTC proposed rules concerning the protection of cleared swaps and associated collateral of futures commission merchants (FCM) customers. Among other items, the rules: (i) parallel the regulations governing the account in which FCMs currently hold futures customer collateral pre-bankruptcy and (ii) contain analysis of the costs and benefits of the four models of protection being considered, as described in the ANPR issued by the CFTC on November 19, 2010. CFTC Fact Sheet. CFTC ANPR. CFTC Proposed Rule.