MFA Submits Comment Letter to CFTC on Deriatives Clearing Organization Risk Management Rules

MFA submitted a comment letter to Commodity Futures Trading Comission (“CFTC”) on the proposed amendments to the derivative clearing organization (“DCO”) risk management rules, permitting futures commission merchants  (“FCMs”) to treat separate accounts of a customer as separate entities for margining and other CFTC regulations. 

The letter, emphasizes MFA’s support of the Commission’s efforts to to turn the limited relief granted in CFTC Letter 19-173 into regulation, offering more clarity and certainty regarding its scope. However, MFA’s letter raises concerns about the potential unintended consequences of the proposed rules, which could disrupt long-standing practices of FCMs and their customers.

MFA suggests that the Commission’s proposed prescriptive rules are unnecessary, and there is insufficient evidence to demonstrate the benefits of the proposal for FCMs or the broader markets.