I respectfully concur on the Final Rule on the Regulations to Address Margin Adequacy and to Account for the Treatment of Separate Accounts by Futures Commission Merchants (FCMs) (Separate Accounts Final Rule). I am pleased that the Separate Accounts Final Rule has resolved two critical issues with the proposed rule that were unworkable because of 1) conflicts of law under U.S. banking and securities regulation and foreign banking law, and operational realities regarding the cross-border movement of funds, and 2) lack of regulatory clarity for the handling of administrative errors and operational constraints. In particular, the significant changes in the proposed rule from existing regulatory requirements under CFTC Letter No. 19-17, which FCMs have implemented and complied with for the past 5 years, were not supported by robust cost-benefit analysis to justify imposing overly burdensome new rules. I greatly appreciate the support of Chairman Behnam and the efforts by CFTC staff to address my concerns, and the engagement with my fellow Commissioners.

I would like to thank Daniel O’Connell, Bob Wasserman, and Clark Hutchison in the Division of Clearing and Risk for their work on the Separate Accounts Final Rule and the significant time and effort spent working with my office, especially to reconsider the requirements for a one business day margin call and circumstances involving banking holidays in the eurozone, and “unusual” administrative errors and operational constraints.[1] I applaud their dedication to strengthening our markets and addressing the public comments.

[1] Statement of Commissioner Caroline D. Pham in Support of the Treatment of Separate Accounts Proposal (Feb. 20, 2024), https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement022024b.