Enhancing Customer Protection

The Asset Management Group (AMG) of SIFMA provides comments to the Commodity Futures Trading Commission (CFTC) on proposed rulemaking, which would enhance protections afforded customers and customer funds held by Futures Commission Merchants (FCMs) and Derivatives Clearing Organizations (DCOs), RIN 3038-AD88.

SIFMA AMG strongly endorses the CFTC’s proposal to better protect clients’ collateral and to improve transparency regarding the FCMs with which they trade.  Specifically, SIFMA AMG believes that:

• • FCMs should maintain sufficient margin to cover all margin deficits and maintain segregation between customer accounts – an FCM should not be able to look to one customer’s excess margin to cover another’s shortfall.
  • The proposed public disclosure requirements will greatly assist our members in choosing FCMs to handle their customers’ funds and in holding FCMs accountable to their customers.  In particular, SIFMA AMG supports the proposed requirement for FCMs to make publicly available on their websites daily margin segregation calculations together with disclosure documents that would be material to a customer’s decision to do business with an FCM.  Some relatively small additional measures could be taken to make more information available to the public in a straightforward and easy manner.