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CFTC Proposes Rules for DCOs to Align with International Standards

| FinReg

The Commodity Futures Trading Commission has proposed final rules to implement enhanced risk management standards for systemically important derivatives clearing organizations.  These rules are significant because they bring the CFTC’s enforcement standards in line with international standards, ultimately enabling clearing organizations to be central counterparties for both US and international derivatives transactions.  Among the key focal points of the final rules are to:

  • Increase financial resources requirements for systemically important derivatives clearing organizations that are involved with more complex transactions
  • Prohibit the inclusion of assessments when clearing organizations calculate their available default resources 
  • Enhance system safeguards for business continuity and disaster recovery at clearing organizations 

Click here for a copy of the CFTC press release and here for the proposed rules.  A fact sheet can be found here.