CFTC to Host Public Roundtable on Residual Interest Deadline

The CFTC Division of Swap Dealer and Intermediary Oversight and the Office of the Chief Economist will host a public roundtable to discuss a report on the Residual Interest Deadline on March 3, 2016, at 10:00 a.m.

"Residual Interest" refers to the requirement that FCMs use their own money, known as "residual interest," to satisfy any deficit in customer segregated or Rule 30.7 secured accounts as a cushion to help ensure that the FCM does not become undersegregated or undersecured. Under a phased-in compliance schedule adopted by the CFTC last year, an FCM is required to maintain the required amount by the Residual Interest Deadline of 6:00 p.m. Eastern Time, on the next business day, to cover customers' undermargined amounts that were computed as of the close of business on the previous day. That action also removed December 31, 2018, as the automatic termination date of the phased-in compliance period. As a result, the Residual Interest Deadline will remain 6:00 p.m. Eastern Time pending the possibility of future CFTC rulemaking.

CFTC Rule 1.22 directs staff to complete and publish for public comment by May 16, 2016 a report addressing the practicability of amending the Residual Interest Deadline from 6:00 p.m., Eastern Time, to the time of settlement or to some other time of the day. In addition, CFTC Rule 1.22 directs staff to conduct a public roundtable regarding specific issues to be covered by the report.

Comments on the topics discussed at the roundtable must be submitted by March 31, 2016.