Regulatory Alerts2023-11-21 | 2023-24774Investment of Customer Funds by Futures Commission Merchants and Derivatives Clearing Organizations
The Commodity Futures Trading Commission proposes amendments to regulations governing the types of investments that futures commission merchants and derivatives clearing organizations may make with customer funds held for futures, foreign futures, and cleared swap transactions. The proposal expands the list of permitted investments to include instruments such as foreign sovereign debt, U.S. Treasury exchange-traded funds, commercial paper, and corporate notes, while simultaneously establishing market risk capital charges that firms must apply when computing adjusted net capital. Additionally, the rulemaking revises reporting obligations for depository holdings and eliminates the mandate that depositories must provide read-only electronic access to customer accounts for funds to qualify as segregated.