Mon, Nov 24, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

FIA statement on CFTC customer protection rule

Thursday, October 31, 2013
Opalesque Industry Update - The Futures Industry Association today issued the following statement regarding the Commodity Futures Trading Commission’s final rule on customer protections:

FIA strongly supports the vast majority of the customer protections contained in the rule, many of which grew out of recommendations made by an FIA task force in the wake of the MF Global collapse. The codification of these requirements strengthens the protections and safeguards for customers, and we commend the Commission for finalizing these important changes.

However, we oppose the CFTC’s final language on residual interest for all the reasons that FIA, agricultural customers and Members of Congress have articulated to the Commission over the last several months of its consideration. Once it takes effect, this rule will require far-reaching changes to industry practices, and as has been recognized, this will most disadvantage agricultural customers and small futures commission merchants. Importantly this residual interest provision would not protect customers in an MF Global situation.

We appreciate that in the final rule the Commission modified the residual interest requirement by phasing in the required changes over five years and by requiring a study and a roundtable to assess the impact of such changes. We are concerned, however, that it may prove difficult for any future Commission to adjust or revise this policy. The Commission’s residual interest requirements are based on an interpretation of FCM obligations that goes against decades of CFTC and industry practice. We disagree with this interpretation, and while we support studying the impact of the changes required by the new requirements, we want the study to be meaningful.

For that reason, we welcome the comments made by several Commissioners at yesterday’s meeting that recognize the agency’s discretion and willingness to modify its policy on residual interest in response to the information it receives about the impact of these changes. Nonetheless, we think the better course would have been to adopt Commissioner O’Malia’s amendment, which would have achieved the Commission’s purpose without seeming to pre-determine the outcome.

FIA looks forward to working with the Commission over the coming months to provide additional data and facts on the implications of today’s decision.

Futures Industry Association

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - George Soros puts $500m of his money on Bill Gross, Soros, Paulson backed Hispania Activos mulls Realia takeover, Ex-Credit Suisse trader’s hedge fund sees yen shorts as crowded, Hedge hunters double default-swaps as views split, Large hedge fund positions come under pressure, Vikram Pandit's fund picks 50% stake in JM Financial's realty lending arm for $87m[more]

    George Soros puts $500m of his money on Bill Gross From WSJ.com: Before Bill Gross was fully settled in at his new firm, Janus Capital Group Inc., he received an unlikely visit from the chief investment officer of famed investor George Soros ’s firm, according to a person familiar with t

  2. Regulatory - Stringent rules for hedge funds make the financial system fragile[more]

    From FT.com: …It is one thing to impose a regulatory burden when there is a clear need to do so. Banks are underwritten by taxpayers via deposit insurance as well as the too-big-to-fail safety net; they need to be reined in, and if they shrink as a result, that may be welcome. But it is another thin

  3. Investing - Apple: Hedge funds are crazy about it, Greenlight Capital took stake in Citizens Financial after IPO, Tiger Global added to Hertz, exited Dollar General last quarter, Oberweis sells NQ Mobile stake as Valiant adds shares, Whitney Tilson sticks to losing bet on MagicJack shares, Brigade Capital backs €90m Quinn sale[more]

    Apple: Hedge funds are crazy about it From Techinsider.net: Apple Inc. is still the most popular stocks among hedge funds. According to a recent report by hedge fund tracking site Insider Monkey, more than one out of 5 hedge funds are invested in Apple Inc. At the moment there are

  4. Greenlight Re CEO says hedge fund reinsurance strategy buzz is validating[more]

    From Artemis.bm: The attention being paid to the hedge fund reinsurance business model and the fact that others are now looking to leverage bits of it within their own strategies, is validating for reinsurer Greenlight Capital Re, according to CEO Bart Hedges. There has been an increasing buzz

  5. Legal - Hedge fund manager fights £8m tax tribunal ruling[more]

    From FT.com: A hedge fund manager who may have to repay £8m in tax is trying to overturn a tribunal ruling that found he had attempted to shelter millions in an avoidance scheme. Patrick Degorce, chief investment officer at Theleme Partners, lost a tax tribunal case last year. HM Revenue & Customs c