FIA suggests alternative framework for CFTC to clarify separate account margining

30 June 2023

FIA has filed comments with the US Commodity Futures Trading Commission supporting the agency’s efforts to codify relief that market participants have come to rely on in offering separate account margining to customers while recommending that the CFTC take a different approach to adopting the relevant requirements in its rules.

In No-Action Letter 19-17, issued in July 2019, the CFTC’s Division of Clearing and Risk confirmed that FCMs may continue to margin different accounts of the same beneficial owner separately, subject to certain enumerated conditions. A recent rulemaking by the CFTC proposed to write those conditions, plus a number of other additional requirements, into the part of the CFTC’s rules governing clearinghouses.  FIA’s letter argues that the requirements should be housed in the CFTC rules governing FCMs, since they relate to the operations and financial standing of FCMs.  FIA’s letter also highlights how the additional proposed requirements would increase the operational burdens on FCMs and disrupt well-established market conventions, without providing a corresponding benefit to customers.

FIA appreciates the CFTC’s engagement with the industry on this important issue and looks forward to continuing to work with the agency and affected market participants on a pragmatic, permanent regulatory solution.

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