Regulatory Alerts2024-03-01 | 2024-04107Regulations To Address Margin Adequacy and To Account for the Treatment of Separate Accounts by Futures Commission Merchants
The Commodity Futures Trading Commission withdraws its April 2023 proposal to amend derivatives clearing organization risk management regulations and instead proposes new rules to directly require futures commission merchants to ensure customer accounts retain sufficient funds to meet initial margin requirements after any withdrawal. The Commission also proposes regulations permitting clearing futures commission merchants to treat separate accounts of a single customer as accounts of separate legal entities for certain regulatory purposes, subject to specific conditions and internal controls. These measures aim to mitigate systemic risk and protect customer assets by preventing the misuse of funds across different accounts while accommodating distinct investment management strategies.