MFA Submits Letter to CFTC on Proposed Residual Interest Deadline Rules (with Lofchie Comment)

MFA submitted a comment letter to the CFTC in response to the CFTC-proposed rulemaking, "Residual Interest Deadline for Futures Commission Merchants."

MFA stated that it "strongly supports" both the proposed rules and the CFTC's determination to terminate the phase-in period for the residual interest deadline and establish the deadline time as 6:00 p.m., Eastern Time, permanently on the date of settlement. According to MFA, requiring futures commission merchants ("FCMs") to comply with a shorter timeframe would be "problematic." It would not allow sufficient time for FCMs to collect margin from their customers, significantly increasing the operational burdens and costs on FCMs and their customers. Therefore, MFA urged the CFTC not to consider shortening the deadline in the future.

Lofchie Comment: This illustrates that imposing ever-greater regulation on financial institutions does not help the customers onto whom the burden is passed. Accordingly, it is easy to see buy-side firms advocating against the imposition of further burdens on sell-side firms.

See: MFA Comment Letter.
Related news: CFTC Proposal Regarding Residual Interest Deadline for FCMs (Fed. Reg.) (November 14, 2014).