CFTC Committee Advances Recommendations on Custody, T+1 and Digital Assets

The CFTC Global Markets Advisory Committee ("GMAC") advanced recommendations on: (i) the use of U.S. Treasuries as margin collateral; (ii) the securities market's move to T+1 securities settlement; and (iii) a digital asset taxonomy.

The recommendations are as follows:

• Global Market Structure Subcommittee Recommendation - Inclusion of U.S. Treasury ETFs as Eligible Initial Margin Collateral. The GMAC recommended the CFTC "expand the universe of liquid assets that can be posted as uncleared margin, specifically to include U.S. Treasury ETFs."
• Technical Issues Subcommittee Recommendation – Publication of Resource Document to Support Transition to T+1 Securities Settlement. The GMAC published a resource document to support market participants with regard to the implications of T+1 for various markets; the resource document provides a list of resources to help firms prepare for the transition.
• Digital Asset Markets Subcommittee Recommendation – Adoption of an Approach for the Classification and Understanding of Digital Assets. The GMAC recommended a "clear, consensus-driven approach to classifying assets and the functions they serve underpins robust markets and effective regulation" as an initial basis for a consensus-driven, functional taxonomy. The GMAC stated that it intends to reassess any future developments to provide further recommendations.