📈CFTC Final Rule on Customer Funds Investment Regulations
Investment of Customer Funds by Futures Commission Merchants and Derivatives Clearing Organizations
Summary
The Commodity Futures Trading Commission ("Commission" or "CFTC") is amending its regulations governing the types of investments that futures commission merchants and derivatives clearing organizations may make with funds held for the benefit of customers engaging in futures, foreign futures, and cleared swaps transactions. The Commission is also revising asset-based and issuer-based concentration limits for the investment of customer funds. The Commission is also specifying market risk capital charges that a futures commission merchant must take on new investments added to the list of permitted investments in computing the firm's adjusted net capital. The amendments also revise regulations that require each futures commission merchant to report to the Commission, and to the firm's designated self-regulatory organization, the name, location, and amount of customer funds held by each depository, including any investments of customer funds held by the depository. Lastly, the Commission is eliminating the requirement that each depository holding customer funds must provide the Commission with read-only electronic access to such accounts for the futures commission merchant to treat the funds as customer segregated funds.
Agencies
- Commodity Futures Trading Commission
Business Impact
$$ - Med
The regulatory changes by the Commodity Futures Trading Commission (CFTC) directly impact how Futures Commission Merchants (FCMs) and Derivatives Clearing Organizations (DCOs) manage customer funds, including new permitted investments and concentration limits. These changes necessitate compliance adjustments by businesses involved in futures trading and may affect their liquidity and risk management strategies.