CFTC’s Division of Clearing and Risk Issues Extension of Time for Compliance from Certain Pre-Trade Screening Requirements

The CFTC Division of Clearing and Risk (DCR) announced an extension of time for compliance in order to provide additional time for market participants to coordinate on the communication of limits for give-ups and bunched orders for futures and swaps. This extension of time is intended to provide sufficient time to transition to fully compliant pre-trade screening no later than June 1, 2013. Additionally, DCR also announced the issuance of an extension of time for compliance from pre-trade screening requirements for those transactions executed on DCMs that do not have a system permitting FCMs to set pre-execution limits, until the earlier of the date on which the DCM implements such a system, or June 1, 2013.

Beyond the extension of time, DCR also explained that the limits that FCMs impose pursuant to this rule may be "simple numerical limits"; i.e., they are not required to reflect a portfolio margin analysis or an ultimate risk analysis.

Cross-Reference: CFTC Rule 1.73 (Clearing futures commission merchant risk management -- effective 10/01/2012).

View letter in full here (links externally to CFTC website).