Release Number 8714-23

CFTC Approves Final Governance Rule, Two Proposals and Other Business at the Commission Open Meeting

June 07, 2023

— The Commodity Futures Trading Commission at its open meeting today approved the following final rule, proposed rules and a notice of proposed comparability determination that includes a request for comment:

Final Rule: Governance Requirements for Derivatives Clearing Organizations

The Commission unanimously approved a final rule that adopts amendments to its rules to require derivatives clearing organizations (DCOs) to establish and consult with one or more risk management committees (RMCs) comprised of clearing members and customers of clearing members on matters that could materially affect the risk profile of the DCO. In addition, the Commission is adopting minimum requirements for RMC composition and rotation, and requiring DCOs to establish and enforce fitness standards for RMC members. The Commission is also adopting requirements for DCOs to maintain written policies and procedures governing the RMC consultation process and the role of RMC members. Finally, the Commission is adopting requirements for DCOs to establish one or more market participant risk advisory working groups (RWGs) that must convene at least twice per year, and adopt written policies and procedures related to the formation and role of the RWG.  

The final rule is effective with publication in the Federal Register. DCOs must comply with the final rule one year after the effective date.

Proposed Rule: Derivatives Clearing Organizations Recovery and Orderly Wind-down Plans; Information for Resolution Planning

The Commission approved the proposed rule concerning recovery and orderly wind-down plans for systemically important derivatives clearing organizations and DCOs that elect to be subject to the provisions in Subpart C of part 39 of the Commission’s regulations. It would, among other things, address certain risk management obligations, modify definitions, and codify existing staff guidance.  The proposal would also require DCOs that are not designated as systemically important, and which have not elected to be covered by Subpart C of part 39, to submit orderly wind-down plans. In addition, the proposal would make conforming amendments to certain provisions, revise the Subpart C Election Form and Form DCO, and remove stale provisions. 

The Commission unanimously approved the proposed rule to revise the CFTC’s regulations for large trader position reporting for futures and options. These regulations require futures commission merchants, clearing members, foreign brokers, and certain reporting markets (reporting firms) to report to the Commission position information for the largest futures and options traders.

This proposed rule has a 60-day comment period after publication in the Federal Register.   

Notice of Proposed Determination and Order/Request for Comment: Capital Comparability Determination in connection with an Application Submitted on behalf of Nonbank Swap Dealers Domiciled in the French Republic and Federal Republic of Germany and Subject to Capital and Financial Reporting Requirements of the European Union

The Commission unanimously approved the proposed comparability determination to solicit public comment on an application submitted by the Institute of International Bankers, International Swaps and Derivatives Association, and Securities Industry and Financial Markets Association requesting that the Commission determine that the capital and financial reporting laws and regulations of the European Union applicable to CFTC-registered swap dealers organized and domiciled in the French Republic and Federal Republic of Germany provide sufficient bases for an affirmative finding of comparability with respect to the Commission’s swap dealer capital and financial reporting requirements adopted under the Commodity Exchange Act. The Commission is also soliciting public comment on a proposed order providing for the conditional availability of substituted compliance in connection with the application.

This proposed comparability determination and order have a 60-day comment period after publication in the Federal Register. 

Additional information on these rulemakings, including statements of the Chairman and the Commissioners, is available here.