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Trade Talk Blog: CFTC Proposal Poses “Monumental Challenge to FCMs”


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A rule proposed by the Commodity Futures Trading Commission (CFTC) would require futures commission merchants (FCMs) to maintain “residual interest” exceeding the sum of all margin deficits in customer segregated accounts. Some claim that this proposal will completely overhaul our industry and present “monumental challenges to FCMs”.

If you’re not already familiar with this issue, take a look at this John Lothian Newsletter Special Report and the video commentary posted below. The video includes excerpts from the CFTC roundtable that took place on February 5.

To quote John Lothian: “The meeting led by Robert Wasserman, chief counsel of the CFTC’s Division of Clearing and Risk, included panelists Mike Dawley of Goldman Sachs and FIA chairman and Kim Taylor, President of CME Clearing, who argued that the increased margin requirements under the proposal are substantial. Dawley said the rule, if passed in its current form, would be ‘one of the most monumental events’ in his 30 years in the industry.”

The official comment period for this proposition ends tomorrow, February 15. If you’d like to submit a comment to the CFTC for consideration, you may do so here.