RegAlert2017-01-26 | CFTC Staff Letter 17-03Added · Updated
CFTC Staff Letter 17-03: No-Action Position on Withdrawals of Residual Interest Under Regulation 22.17(b)
The Division of Swap Dealer and Intermediary Oversight will not recommend enforcement action against futures commission merchants that withdraw excess residual interest from Cleared Swaps Customer Accounts prior to completing the daily segregation calculation required by Commission Regulation 22.17(b). This relief applies only if the withdrawals correspond directly to margin payments received from customers to reduce undermargined amounts and do not result in the futures commission merchant holding less than 110% of its current targeted residual interest balance. Additionally, the Division will not enforce Regulation 22.17(c) notification requirements for these specific withdrawals, provided the futures commission merchant maintains robust risk management controls and documents the impact of other intraday activities on segregation.
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U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-6700
Facsimile: (202) 418-5407
eflaherty@cftc.gov
Division of Swap Dealer and
Intermediary Oversight
Eileen T. Flaherty
Director
CFTC Letter No. 17-03
No-Action
January 26, 2017
Division of Swap Dealer and Intermediary Oversight
Ms. Allison Lurton
Senior Vice President and General Counsel
Futures Industry Association
2001 Pennsylvania Avenue, NW Suite 600
Washington, DC 20006
Re: No-Action Position Regarding Regulation 22.17(b) Withdrawals of Residual Interest Dear Ms. Lurton:
This is in response to your letter dated December 2, 2016 to the Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commodity Futures Trading Commission (“Commission”). By your letter, you request, on behalf of the Futures Industry Association (“FIA”) and member futures commission merchants (“FCMs”) an interpretation regarding withdrawals of FCM excess residual interest from “Cleared Swaps Customer Accounts” and compliance with Commission Regulation 22.17(b).1 After review of the request, the Division has determined that no-action relief from Commission Regulation 22.17(b) is appropriate with respect to withdrawals of FCM excess residual interest in the amount and at the times as described below, subject to the conditions set forth herein. 1 The Commodity Exchange Act (“Act”) may be found at 7 U.S.C. 1 et seq., and the Commission’s regulations may be found at 17 CFR Ch. 1. The terms “Cleared Swaps Customer” and “Cleared Swaps Customer Account,” as used in this letter, are as defined in Commission Regulation 22.1.
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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