CFTC Proposes to Amend Derivatives Clearing Organization Regulations

Part 39 of the CFTC regulations implements the statutory core principles for DCOs. Since the Part 39 regulations were adopted, CFTC has worked with DCOs to address questions on interpretation and implementation of the requirements established in regulations. Therefore, CFTC believes it would be helpful to revise or clarify certain provisions of Part 39 and to codify staff relief or guidance granted in the interim. Additionally, in response to certain recent events, CFTC is proposing new requirements with respect to default procedures and event-specific reporting. CFTC believes these changes will provide greater clarity and transparency for DCOs and DCO applicants and lead to more effective DCO compliance and risk management. In addition to the amendments proposed herein, CFTC requests comment for any other aspects of Part 39 that respondents believe CFTC should clarify or otherwise amend. CFTC has also published statements from the CFTC Chairman J. Christopher Giancarlo and Commissioner Dan M. Berkovitz on the proposed amendments. 

This proposal is in keeping with the CFTC’s Project KISS, an agency-wide initiative to adopt appropriate changes and simplify agency rules, regulations, and practices to make them less burdensome, less costly, and more transparent to all market participants. In 2011, CFTC had adopted regulations in Subparts A and B of Part 39 to implement the DCO Core Principles. In 2013, CFTC had adopted regulations in Subpart C of Part 395 to establish additional standards for compliance with the DCO Core Principles for the DCOs that have been designated as systemically important by FSOC in accordance with the Dodd-Frank Act.

Related Link: Federal Register Notice

Comment Due Date: July 15, 2019

Keywords: Americas, US, Banking, Securities, PMI, Derivatives Clearing Organizations, Reporting, Technical Amendments, Project KISS, OTC Derivatives, CFTC