CFTC Rule Proposal: Clearing Member Risk Management

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Gavel.png FINAL RULE: This page refers to the proposed rule on clearing member risk management. A final rule was approved at the CFTC Open Meeting, March 20, 2012
Dodd-Frank Timeline, Clearing Member Risk Management
Final Rule Issue Effective Date Compliance Date, Rule 1.73 Compliance Extension, Bunched Orders
April 9, 2012 October 1, 2012 June 1, 2013 September 1, 2013

On July 19, 2011, the CFTC held an open meeting to consider two proposed and three final rules related to the Dodd-Frank Act. One of the proposed rules concerned clearing member risk management registered swap entities.[1]

Under the proposal, certain swap entities - futures commission merchants, swap dealers and major swap participants - would be required to:

  • establish credit and market risk-based limits based on position size, order size, margin requirements, or similar factors;
  • use automated means to screen orders for compliance with the risk-based limits;
  • monitor risk limits intra-day and overnight;
  • conduct stress tests of all positions in the proprietary account and all positions at least once per week;
  • monitor liquidation costs at least once per month; and
  • test all lines of credit at least once per quarter.

Related Documents: Fact Sheet, Q&A, Federal Register Document


References

  1. Open Meeting on Three Final Rule Proposals and Two Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on July 19, 2011.

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