FIA Requests that CFTC Codify Treatment of Separate Accounts by FCMs

Commentary by Nihal Patel

FIA requested that the CFTC codify no-action relief regarding the treatment of separately managed accounts held at futures commission merchants ("FCMs").

The request relates to relief originally granted in CFTC Letter No. 19-17 (subsequently extended in Letters 20-28 and 21-29). The relief is currently set to expire in September 2022. According to FIA, codification of the relief is "essential" to provide FCMs and customers certainty on the relevant rules. The letter also addresses processes implemented by FCMs to comply with the relief and challenges experienced during examinations relating to interpretations of CFTC Rule 1.56(b) ("Prohibition of guarantees against loss").


The interpretation of the separate account rules is a regulatory problem created by the past administration that continues under the new CFTC leadership. This was foreseeable from the time the interpretive guidance was first provided and was compounded by later staff statements. FIA is right that this is an issue that the CFTC should address through considered rulemaking.

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