CFTC Announces Measures to Enhance Protection of Customer Funds


On August 8, 2016, the U.S. Commodity Futures Trading Commission (CFTC) announced three separate enhancements relating to the protection of customer funds. The new protections address the exemption of certain Federal Reserve Banks from liability under the Commodity Exchange Act, as well as the use of money market funds by derivatives clearing organizations and futures commission merchants. Press Release.

CFTC Time Extension for Pre-Trade Screening Requirements

On September 26, the CFTC announced an extension of time for compliance for market participants to coordinate on the communication of limits for give-ups and bunched orders for futures and swaps.  The extension is intended to provide sufficient time to transition to fully compliant pre-trade screening no later than June 1, 2013.  CFTC Release.

CFTC Rule on Aggregation for Position Limits for Futures and Swaps

On May 18, the CFTC approved a proposed rule that would modify the aggregation provisions for limits on futures and swaps. The proposed rule would permit any person with greater than 10% ownership or equity interest in an entity to disaggregate the owned entity’s positions, provided that protections and firewalls are in place to ensure trading decisions are made independently from one another. CFTC Release.

CFTC Final Rules on Position Limits for Futures and Swaps

On October 18, pursuant to Section 737 of the Dodd-Frank Act, the CFTC adopted final rules requiring limits on speculative positions in 28 core physical commodity contracts and their economically equivalent futures, options, and swaps. The position limits established under the final rules will be effective 60 days after the term “swap” is further defined by CFTC rulemaking. CFTC Fact Sheet.