November 13, 2014

CFTC Staff Issues No-Action Position and Interpretations Addressing the Holding of Customer Funds

Washington, DC — The U.S. Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) today issued no-action relief to futures commission merchants (FCMs) concerning the holding of customer funds deposited to margin foreign futures and foreign options transactions under Regulation 30.7.

Regulation 30.7 limits the amount of customer margin funds an FCM is permitted to maintain in accounts with non-U.S. depositories to 120 percent of the required margin on the customers’ foreign futures and foreign options positions. The no-action relief effectively permits an FCM to exclude customer funds deposited with a foreign bank or trust company that otherwise qualifies as a depository under Regulation 30.7 from the calculation of the 120 percent limit.

The Division also issued two interpretations of Regulation 30.7. The first interpretation provides that an FCM, under certain prescribed circumstances, may agree with a foreign depository to net offsetting transfers of customer funds between the FCM and the foreign depository instead of executing multiple transfers of funds between the FCM and the foreign depository. The second interpretation provides that an FCM, under the circumstances set forth in the interpretation, may substitute U.S. dollars for foreign currency in 30.7 customer accounts and consider such transaction as for the benefit of the FCM’s customers.

Last Updated: November 13, 2014