CFTC Extends Comment Period on Clearing Organization Request to Expand Activities
Commentary by Steven Lofchie
The CFTC extended the comment period on the application of FTX US Derivatives' proposal to expand its services.
FTX, which is registered with the CFTC as a derivatives clearing organization, currently intermediates futures contracts on a non-intermediated, but fully collateralized, basis for retail traders. FTX applied to continue to clear products without intermediation, but to do so even while providing margin.
The comment period was extended to May 11, 2022.
Commentary
The big issue is whether the clearing organization has enough resources to cover potential losses from defaulting customers. The questions in the CFTC's request for comments are instructive in illustrating how the CFTC thinks about default risk at a clearing organization.