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CFTC holds open meeting and advances DCO reporting proposal

11 November 2022

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On 10 November, the US Commodity Futures Trading Commission voted 5-0 to advance a proposed rule that would amend certain reporting and information regulations applicable to derivatives clearing organizations (DCOs).

The CFTC also advanced a proposed order and request for comment on a comparability determination for nonbank swap dealers under the jurisdiction of Mexico.

Proposed Rule on Reporting and Information Regulations Applicable to DCOs

Current CFTC rules require a DCO to report to the Commission on a daily basis initial margin, variation margin, cash flow, and position information for each clearing member, by house origin and by each customer origin. In 2020, however, the CFTC amended this rule to also require DCOs to report this information by individual customer account.

FIA clearing firms, working with DCOs, raised concerns with CFTC staff that it was impossible for DCOs to provide to the Commission with daily variation margin and cash flows by individual customer account. Ultimately, FIA helped to secure relief from these reporting requirements.  

The proposed rule advanced by Commission formally codifies this relief.

Additionally, the proposed rule makes additional changes to the CFTC’s regulations applicable to DCOs, including among other things, updating information requirements associated with commingling customer funds and positions in futures and swaps in the same account, addressing certain systems related reporting obligations regarding exceptional events, and revising certain daily and event-specific reporting requirements.

Comments on this proposal must be received 60 days after the date of publication in the Federal Register.

Proposed Order and Request for Comment on an Application for a Capital Comparability Determination Submitted on behalf of Nonbank Swap Dealers subject to Regulation by the Mexican Banking and Securities Commission

The CFTC advanced 4-0, with Commissioner Caroline Pham concurring, a request for public comment that the Commission determine that the capital and financial reporting laws and regulations of Mexico applicable to CFTC-registered swap dealers organized and domiciled in Mexico, and licensed with the Mexican Banking and Securities Commission (Comision Nacional Bancaria y de Valores) as broker-dealers (casa de bolsa), are comparable and compliant with respect to the Commission’s swap dealer capital and financial reporting requirements adopted under the Commodity Exchange Act.

Three CFTC-registered nonbank swap dealers licensed with the Mexican Banking and Securities Commission submitted an application requesting that the Commission determine that Mexico’s capital adequacy and financial reporting requirements, and related financial recordkeeping and reporting requirements, are comparable to the corresponding CFTC regulations.

The Commission also is soliciting public comment on a proposed order providing for the conditional availability of substituted compliance in connection with the application.

Comments on this proposal must be received 60 days after the date of publication in the Federal Register.

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