Sat, Jan 31, 2015
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. Opalesque Exclusive: Ex-Citi trader launches 'sleep-at-night’ long/short equity fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: After working at Citi's proprietary trading desk, managing a large portfolio between 2008 and 2011, Joel S. Salomon founded SalaurMor Management in New Yor

  2. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  3. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  4. Update: Prosecutors seek 12 years for hedge fund manager Francisco Illarramendi[more]

    Komfie Manalo, Opalesque Asia: Federal prosecutors have asked the court to sentence convicted hedge fund manager Francisco Illarramendi to 12 years imprisonment for running an elaborate Ponzi scheme that bilked investors hundreds of millions in dollars, including a Venezuelan pension fund, report

  5. Institutions - Ontario pension fund leader calls all asset classes ‘expensive’, Taiwan's BLF plans $2bn in alternative mandates[more]

    Ontario pension fund leader calls all asset classes ‘expensive’ From WSJ.com: The head of one of the world’s largest pension funds said that across asset classes, “everything is expensive.” Ron Mock, who leads Canada’s $141 billion Ontario Teachers’ Pension Plan, said that the plan would