Thu, Feb 23, 2017
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. People - Kuwait wealth fund head Al Saad said to step down after 14 years[more]

    From Bloomberg.com: Kuwait Investment Authority is set to name Farouk Bastaki as managing director, replacing Bader Al Saad who ran the world's fifth-largest sovereign wealth fund for 14 years, a person familiar with the matter said. The KIA, as the fund is known, is finalizing the appointment, said

  2. Manager Profile - Eddie Lampert: a painful entanglement with Sears[more]

    From Moneyweek.com: "In the long run we are all dead." Lex in the Financial Times reached for the famous quote from John Maynard Keynes in January when, after a long and unforgiving decline, the clock finally appeared to be running out on Sears, the iconic US department store group. Yet the group's

  3. Investing - Hedge funds quit Aberdeen shorts as shares begin to recover, Hedge funds' next big short: U.S. malls, O'Connor fund owns 9.5% of Protalix Biotherapeutics, U.S. hedge fund takes position in Macau hotel The 13[more]

    Hedge funds quit Aberdeen shorts as shares begin to recover From Investmentweek.co.uk: The last two hedge funds to short Aberdeen Asset Management have removed their positions, as the fund group's shares begin to show signs of recovery after a difficult few years. According to the Financ

  4. Latin America, high yields and Asia Pacific strategies dominate hedge fund returns in January[more]

    Komfie Manalo, Opalesque Asia: Latin America (+7.04%), high yield (5.63%), and Asia-Pacific (+5.06%) strategies dominated hedge fund performance in January, data provider Hennesee Fund Research said. The bottom three strategies for the mont

  5. Investing - Hedge funds loading up on this dividend stock, The biggest hedge funds have been piling into bank stocks[more]

    Hedge funds loading up on this dividend stock From Incomeinvestors.com: Hedge funds are backing up the truck on Cameco Corp stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans - including Ray Dalio, Ken Griffin, and Chuck Royce - have been quietly building positio