The CFTC Division of Swap Dealer and Intermediary Oversight and the CFTC Office of the Chief Economist published a report on the Residual Interest Deadline for Futures Commission Merchants. The report recommends continuing the current deadline of 6 o'clock p.m., Eastern Time, effectively T+1 6 p.m. EST, for requiring futures commission merchants ("FCMs") to fund undermargined customer accounts.
CFTC Rule 1.22 requires FCMs to maintain their own capital ("Residual Interest") in customer segregated accounts by the Residual Interest Deadline to cover any customer whose account is undermargined. The "Residual Interest Deadline" is the point in time by which FCMs must ensure that the requisite Residual Interest amount required by Rule 1.22 is held in a customer's account. This deadline in turn affects when customers must post margin with the FCMs.
The report reviewed several comments and industry feedback on the amendments to the proposal, which were largely supportive of maintaining the current deadline. The report concluded that CFTC staff has "no basis" to believe that it was prudent to move up the deadline.
Comments on the report must be received on or before June 13, 2016.
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