Category: Futures Commission Merchants

Categories
Commodity Pool Operators Commodity Trading Advisors Futures Commission Merchants Mutual Funds and Investment Advisers

Part 3: Separate Accounts and CFTC Regulation §1.44—Different Views of the Same Situation

Andrew P. Cross —

Andrew Cross Headshot Image

This is the next installment of our multi-part series on the February 20 proposal by the U.S. Commodity Futures Trading Commission (the “CFTC”) in respect of proposed CFTC Regulation §1.44 (the “Proposed Rule”).

The previous post provided general information about the nature of the relationship between institutional investors and their investment managers. Indeed, that relationship was one of the primary reasons for the Proposed Rule.

This post considers different views of the relationship between an investment manager and its clients, as background to a discussion of the Proposed Rule.

Some market participants and commenters view the Proposed Rule as creating risk, while others view the Proposed Rule as a necessary nuisance. In short, different market participants have different views of the same situation.

Continue reading “Part 3: Separate Accounts and CFTC Regulation §1.44—Different Views of the Same Situation”
Categories
Commodity Pool Operators Commodity Trading Advisors Futures Commission Merchants Mutual Funds and Investment Advisers

Part 2: Separate Accounts in the Investment Management Context

Andrew P. Cross —

This is the third of a multi-part series (Introduction; Part 1) on a February 20 proposal by the U.S. Commodity Futures Trading Commission (“CFTC”) to implement CFTC Regulation §1.44 (the “Proposed Rule”) and related amendments to other CFTC regulations.

This part will provide background information about the nature of the relationship between institutional investors and their investment managers, since that relationship is one of the primary reasons for the Proposed Rule in the first instance.

Continue reading “Part 2: Separate Accounts in the Investment Management Context”
Categories
Commodity Pool Operators Commodity Trading Advisors Futures Commission Merchants Mutual Funds and Investment Advisers

Part 1: The Margin Adequacy Requirement under CFTC Rule 1.44 Generally

Andrew P. Cross —

This is the second of a multi-part series on a February 20 rule proposal by the U.S. Commodity Futures Trading Commission (“CFTC”) to:

(1) require every futures commission merchant (“FCM”) to ensure that a customer does not withdraw funds from its account with the FCM if the post-withdrawal balance of that account would be insufficient to meet the initial margin requirements applicable to that customer (a “Margin Adequacy Requirement”); and

(2) permit an FCM to treat the separate accounts of a single customer as accounts of separate entities, subject to the satisfaction of risk-mitigation conditions.

    To implement the Margin Adequacy Requirement in the separate account context, the CFTC has proposed the promulgation of new CFTC Regulation §1.44 (the “Proposed Rule”) and related amendments to various other existing CFTC regulations.

    Continue reading “Part 1: The Margin Adequacy Requirement under CFTC Rule 1.44 Generally”
    Categories
    Commodity Pool Operators Commodity Trading Advisors Futures Commission Merchants Mutual Funds and Investment Advisers

    Introduction: CFTC Proposes Regulations to Address Margin Adequacy and to Account for the Treatment of Separate Accounts by Futures Commission Merchants

    Andrew P. Cross —

    On February 20, 2024, the U.S. Commodity Futures Trading Commission (the “CFTC”) proposed regulations under the Commodity Exchange Act (the “CEA”) that will be of particular interest to futures commission merchants (“FCMs”) and their customers, including institutional investors and their investment managers.

    Continue reading “Introduction: CFTC Proposes Regulations to Address Margin Adequacy and to Account for the Treatment of Separate Accounts by Futures Commission Merchants”
    Exit mobile version