CFTC Extends Comment Deadline on Proposal to Codify Treatment of Separate Accounts by FCMs
The CFTC extended the comment deadline on a rule proposal that would codify no-action relief related to the treatment of separate accounts by futures commission merchants. The new comment deadline is June 30, 2023.
The proposal would add a new section to CFTC Rule 39.13 ("Risk management") to permit FCMs to treat separate accounts of a customer as accounts of separate entities. As previously covered, the proposal is based on the conditions established in no-action relief by the Division of Clearing and Risk and the Market Participants Division in Letter No. 19-17, which was subsequently extended in Letters 20-28, 21-29 and 22-11. In addition, the proposed amendments include:
- supplemental reporting requirements for clearing members that are required to cease separate account treatment;
- a process for clearing members to resume separate account treatment; and
- clarifications relating to the requirement that separate accounts be on a one-business-day margin call (including recognition of operational or administrative issues).
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