CFTC Seeks Public Comment on a Proposal to Create a Separate Account Class for Customer Positions in Cleared OTC Derivatives
Washington, DC – The Commodity Futures Trading Commission (CFTC) has approved for publication in the Federal Register a proposal (Proposal) to amend Part 190 of the CFTC regulations to create a sixth and separate account class for OTC derivatives. The new class would include derivatives that a futures commission merchant (FCM) carries for a customer and submits for clearing through a derivatives clearing organization (cleared OTC derivatives). The creation of this class would permit the extension of certain protections in bankruptcy to (i) the positions that customers of an FCM hold in cleared OTC derivatives, and (ii) the collateral that such customers deposit to secure such positions, in the event that the CFTC has not issued an order permitting the positions and collateral pertaining to such account class to be commingled with positions and collateral relating to the domestic futures account class.
Additionally, the Proposal codifies the appropriate allocation of positions and collateral during bankruptcy, in the event that the CFTC does issue an order permitting the commingling of (i) positions and collateral relating to commodity contracts of one account class with (ii) positions and collateral relating to commodity contracts of the domestic futures account class.
The CFTC seeks public comment on the Proposal. The comment file will remain open for 30 days following publication in the Federal Register. Copies may be obtained by contacting the CFTC’s Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, 202-418-5100 or by accessing the CFTC’s website, www.cftc.gov. Interested parties may submit their comments via email to email@example.com. All comments received will be promptly posted on the CFTC's website.
R. David Gary
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