CFTC Extends Relief for FCM Treatment of Separate Accounts

The CFTC Division of Clearing and Risk extended its no action position on compliance with rules related to Futures Commission Merchant treatment of separate accounts of the same customer.

The conditional no action position contained in CFTC Letter No. 19-17 (as modified in subsequent letters) details "guidance with respect to the appropriate documentation required within customer agreements in accordance with [CFTC] Regulation 1.56 [("Prohibition of guarantees against loss")], as well as the processing of margin withdrawals consistent with CFTC Rule 39.13(g)(8)(iii) [("Risk Management")]." As previously covered, the CFTC put forth an amendment to this risk management rule that would codify no-action relief by FCMs to treat separate accounts of a customer as accounts of separate entities.

The CFTC originally extended its position until the earlier of: (i) June 30, 2025, or (ii) the effective date of any final Commission action. The new extension will remain in effect until July 21, 2025.