DCR and DMO Interpretation regarding use by a derivatives clearing organization of a firm or forced trades process. Request for Interpretation Regarding the Applicability of Commission Regulation 37.3(a)(1) and Section 2(h)(8) of the Commodity Exchange Act to Derivatives Clearing Organizations and their Clearing Members.

The CFTC Division of Clearing and Risk (the Division) interprets Part 39 (subparts A, B and C) to incorporate all of the standards set forth in the PFMIs and, indeed, to be fully consistent with the PFMIs. This position is supported by CFTC Regulation 39.40, which states that [t]his subpart C is intended to establish standards which, together with subparts A and B of this part [Part 39 of CFTC regulations], are consistent with Section 5b(c) of the Act and the Principles for Financial Market Infrastructures… and should be interpreted in that context.

The Division of Clearing and Risk published a letter interpreting Section 2(h)(7)(C)(iii) of the Commodity Exchange Act.

Interpretation with respect to certain auditor independence requirements under Commission Regulation 1.16.

No-action relief and interpretation of certain aspects of Regulation 30.7 with respect to the holding of customer funds in accounts located outside of the U.S.

Staff interpretation regarding notification of the right to segregation of initial margin in uncleared swap transactions and quarterly reporting under Commission Regulations 23.701 and 23.704

Staff issued an interpretation providing that a futures commission merchant (FCM) may credit a customer’s trading account for a margin payment upon the FCM’s initiation of a withdrawal from the customer’s bank account using the Automated Clearing House (ACH) payment processing system. The FCM also may consider such pending margin payments in computing its regulatory capital.

The Division issued an interpretation of CEA Section 1a(10) and Regulation 4.10(d), both of which define the term “commodity pool,” which will permit wholly owned subsidiaries of a single life insurance company to contribute their general account assets to a single vehicle formed by them, and will permit the vehicle to invest directly or indirectly in commodity interests without being deemed a commodity pool.

Interpretation of certain aspects of Regulation 30.7.

North American Derivatives Exchange, Inc. (Nadex) requested interpretative guidance concerning certain provisions of the Commission’s Part 39 regulations applicable to derivatives clearing organizations due to the unique nature of Nadex’s business model.