On June 25, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) extended to October 31 the relief previously granted in CFTC No-Action Letters Nos. 14-02 and 14-45.
The earlier letters provided time-limited relief with respect to compliance with certain conditions contained in a CFTC interpretation of Regulations 1.20, 22.2 and 30.7, which prohibit the commingling of customer segregated funds, cleared swaps customer collateral and customer secured amount funds. The CFTC had stated that the prohibition on the commingling of customer funds would not prevent a customer from meeting margin calls for multiple customer account origins with a single payment, provided, among other conditions, a futures commission merchant (FCM) initially receives the margin payment into the customer segregated funds account. The DSIO relief permits an FCM to accept a customer’s margin payments in any regulated customer funds account, as directed by the customer. An FCM relying on this relief is required to hold sufficient funds in its segregated funds, cleared swaps customer collateral and secured amount accounts to meet the net liquidating equities of all customers in each respective account origin at all times.
CFTC Letter No. 14-88 is available here.