CFTC Sets Comment Deadline on Proposed Amendments to DCO Wind-Down Plan Requirements

The CFTC set a comment deadline of September 26, 2023 for proposed amendments to wind-down plan requirements for derivatives clearing organizations ("DCOs"). The proposal was published in the Federal Register.

As previously covered, the CFTC stated that the proposed revisions and amendments to CFTC Rule 39.39 ("Recovery and wind-down for systemically important derivatives clearing organizations and subpart C derivatives clearing organizations") specify:

• components for the required recovery and orderly wind-down plan of a DCO that is systemically important; and
• information that must be provided to the CFTC for resolution planning.

The CFTC said that under the amendments, an effective and orderly wind-down plan would allow for timely decision-making and the continuation of critical operations to ensure a wind-down occurs in an "orderly and expeditious manner." In addition, the amendments would require DCOs that are not considered systemically important to submit to the CFTC wind-down plans that "incorporate substantially similar information and procedures."

The CFTC asserted that requiring all DCOs to maintain and submit orderly wind-down plans will advance risk management practices, enhance legal clarity and safeguard the public.