CFTC Withdraws Wind-Down Guidance for DCOs

The CFTC’s Division of Clearing and Risk ("DCR") withdrew 2016 staff guidance on recovery plans and wind-down plans maintained by derivatives clearing organizations ("DCOs").

The guidance, contained in CFTC Letter No. 16-61, related to recovery and wind-down plans required under Subpart C of Part 39 ("Derivatives Clearing Organizations"). The DCR's action follows a June 2023 proposal to codify the guidance into a formal rule.

In the withdrawal notice, the DCR stated that the guidance and further rulemaking are not necessary, concluding that existing regulations and international standards were sufficient to ensure DCOs maintain viable plans. The DCR explained that systemically important DCOs, and those electing to be subject to Subpart C, are already required to maintain recovery and wind-down plans consistent with the Commodity Exchange Act, Commission regulations, and international standards. The DCR concluded that the guidance added little value and announced its withdrawal, effective immediately.