FIA submits comments to CTFC on request regarding FTX proposal on non-intermediated DCO model

11 May 2022

FIA has filed public comments with the US Commodity Futures Trading Commission in response to a request by FTX US Derivatives to amend its order of registration as a Derivatives Clearing Organization (DCO) and allow it to modify its existing non-intermediated model.

FIA has a long history of supporting innovation in the derivatives industry and believes the FTX Proposal has prompted a healthy dialogue within the industry. However, there remain significant open questions and a lack of critical public information on the model set forth in the FTX Proposal that makes it difficult to analyze potential negative impacts on the customer protections and the clearing process at the heart of our futures markets.

FIA and its members that are registered as Futures Commission Merchants with the CFTC expressed concern that key principles of the derivatives regulatory oversight structure are not adequately addressed by the FTX Proposal, including:

  • Principles of segregation of customer funds,
  • Conflicts of interest of those entrusted with market operations and customer funds,
  • Financial resourcing and capitalization of market operators,
  • Appropriately planned and sized default resources, and
  • Safeguards of key market operations.

FIA urged the CFTC to consider these key principles and support public dialogue around non-intermediated models. 

Access the full comment letter here.

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