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The Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission ("CFTC") issued an extension of two previous no-action letters to the Futures Industry Association ("FIA"), its member futures commission merchants ("FCMs") and similarly situated FCMs. The letter extends the compliance date of the relief provided in previous no-action letters (14-02 and 14-45) to October 31, 2014 for certain conditions associated with the receipt of customer funds by an FCM, pursuant to CFTC Rule 1.20 ("Futures Customer Funds to Be Segregated and Separately Accounted for"), Rule

The CFTC issued corrections to the final rules, which became effective on January 13, 2014, enhancing the protections afforded to customers and customer funds. The corrections amend erroneous cross-references found in three sections of the final rules and, in one section, insert language that was in the proposed rulemaking. Specifically, the CFTC corrected Rule 1.23 and Rule 30.7, which included erroneous cross-references to other CFTC Rules that do not exist or are incorrect. Additionally, in CFTC Rule 30.7(d)(1), the CFTC added language to the final rules that it stated was contained in the

Commentary by Bob Zwirb

The CFTC Division of Swap Dealer and Intermediary Oversight issued an interpretation of CFTC Rule 30.7(c) ("Treatment of Foreign Futures or Foreign Options Secured Amount"). CFTC Rule 30.7(c) provides that a futures commission merchant ("FCM") must deposit customer funds under the laws and regulations of the foreign jurisdiction that affords the greatest degree of protection to such funds, and provides further that an FCM may not waive any of the protections afforded to customer funds under the laws of that foreign jurisdiction. The interpretation in CFTC Letter 14-110 permits FCMs to deposit

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued an extension of No-Action Letter 14-08 and stated that the CFTC would not take enforcement action against a registered futures commission merchant ("FCM") that holds certain 30.7(c) customer accounts in London and Hong Kong. CFTC Letter 14-08 provides time-limited no-action relief to Rule 30.7(c) ("Treatment of Foreign Futures or Foreign Options Secured Amount"). CFTC Rule 30.7(c) provides that an FCM must deposit customer funds according to the laws and regulations of the foreign jurisdiction that affords the greatest

The CFTC announced that it entered an order against Friedberg Mercantile Group, Inc. ("Friedberg"), a registered futures commission merchant ("FCM"), for a secured amount deficiency, the commingling of customer funds with its proprietary funds and the failure to timely notify the CFTC of the secured amount deficiency. According to the CFTC order, Friedberg's handling of a customer request to transfer $300,000 in segregated funds to secured funds caused Friedberg to fall below its secured amount requirement by approximately $240,000 on February 5, 2013. Additionally, Friedberg's subsequent