Regulatory Alerts2020-06-12 | 2020-08482Added · Updated
Bankruptcy Regulations for Commodity Brokers
The Commodity Futures Trading Commission proposes comprehensive amendments to its Part 190 regulations governing the bankruptcy proceedings of commodity brokers and clearing organizations. The proposed rules modernize liquidation procedures by prioritizing cost-effectiveness and promptness over precision, granting bankruptcy trustees enhanced discretion to handle large customer bases, and establishing ex ante default management and recovery plans for systemically important clearing organizations. These revisions incorporate lessons from recent industry failures like MF Global and Peregrine Financial Group to improve customer property segregation, clarify collateral treatment, and ensure orderly market resolution during financial distress.
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