Release Number 8705-23

CFTC Staff Issues an Advisory Related to Prime Brokerage Arrangements and Derivatives Clearing Organization Registration Requirements

May 17, 2023

— The Commodity Futures Trading Commission’s Division of Clearing and Risk (DCR) today issued a staff advisory that encourages entities using prime brokerage arrangements that provide credit substitution on a centralized basis to examine the specific nature of their activities for the potential need to register as a DCO.

DCR staff recently encountered potential DCO registration issues involving derivatives transactions executed through structures commonly described as prime brokerage arrangements that may be used by swap execution facilities (SEF) or those seeking SEF registration. The staff advisory serves as a reminder to affected entities of their obligations under the Commodity Exchange Act and CFTC regulations.

In addition, the advisory urges these entities to contact DCR staff if they need more information.