Federal Register: Investment of Customer Funds and Funds Held in an Account for Foreign Futures and Foreign Options Transactions

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Gavel.png FINAL RULES: This page refers to the proposed rulemaking on investment of customer funds, credit ratings, and foreign domiciled accounts. The CFTC final rule on the reliance of credit ratings was issued at its July 19, 2011 open meeting. The final rule on investment of customer funds was approved at its December 5, 2011 meeting.
Dodd-Frank Timeline, Investment of Customer Funds
Final Rule Issue Effective Date Compliance Deadline
December 19, 2011 February 17, 2012 June 18, 2012
Dodd-Frank Timeline-Removing References to Credit from Commission Regulations
Proposal Date Final Rule Issue Effective/Compliance Date
November 2, 2010 July 25, 2011 September 23, 2011

On October 26, 2010, the Commodity Futures Trading Commission (CFTC) held its third in the series of open meetings to consider the issuance of proposed rulemakings under the Dodd-Frank Act. One of the agenda items was a proposed rule regarding the investment of customer funds and credit ratings.<ref>Open Meeting on Third Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 3, 2011.</ref>

The proposed rule is designed to address general obligations issued by any enterprise sponsored by the United States, bank certificates of deposit, commercial paper, corporate notes, general obligations of a sovereign nation, and interests in money market mutual funds (MMMFs), as they relate to customer funds, held by futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) in the U.S. and in foreign accounts. Specifically, the rule would:

  • change the list of permitted investments to exclude foreign sovereign debt;
  • clarify the liquidity requirement:
  • remove rating requirements;
  • expand concentration limits for GSEs, CDs, and commercial paper;
  • revise the requirements of acknowledgment letter for investments in MMMFs;
  • apply customer segregated funds investment limitations to 30.7 funds; and
  • remove ratings requirements and depository designation requirements for 30.7 funds.

A chart comparing the current and proposed limits on concentration of issuers and asset types can be found HERE.

Related Documents: Fact Sheet, Q&A, and Rule Proposal as it Appeared in the Federal Register[edit]

References[edit]

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