TechFlow news — More than a year after the collapse of the FTX cryptocurrency exchange, the Commodity Futures Trading Commission (CFTC) voted to adopt a rule that would strengthen protections for customers trading through Derivatives Clearing Organizations (DCOs). The rule, titled "Safeguarding Customer Funds Held by Derivatives Clearing Organizations," will require DCOs registered with the agency and clearing trades to keep customer funds—including those from retail investors—separate from their own proprietary funds.
On Wednesday, CFTC Commissioners Summer Mersinger and Christy Goldsmith Romero voted against the measure, while CFTC Commissioner Kristin Johnson and CFTC Chair Rostin Behnam voted in favor. The proposal will now move to a public comment period.
CFTC Chair Behnam said the CFTC already has safeguards in place for funds belonging to customers of Futures Commission Merchants (FCMs), but no such protections exist for funds held by DCO clearing members. The proposed rule would ensure that clearing member funds and assets are appropriately handled in the event of a DCO's bankruptcy, requiring that clearing member funds be segregated from the DCO’s own funds and deposited with a custodian that explicitly acknowledges in writing that the funds belong to the clearing member, not the DCO.
