The Commodity Futures Trading Commission (CFTC) today announced that it adopted an amendment to its regulations regarding the operation of a commodity broker in bankruptcy. Under appropriate circumstances, as determined by the Commission, the amendment would permit the trustee of a commodity broker in bankruptcy to operate the business of such commodity broker in the ordinary course, including entering into new commodity contracts on behalf of customers.
Currently, Regulation 190.04(d)(2) prohibits a bankruptcy trustee, immediately upon the commencement of the commodity broker’s bankruptcy case, from processing any new trades on behalf of customers (with limited exceptions). This amendment is intended to more fully protect customers of a bankrupt commodity broker in cases where a transfer may be practicable: e.g., where customer property in segregation is sufficient, and where the commodity broker has sufficient capital to operate. Moreover, it permits customers to manage their accounts during the bankruptcy.
The amendment will become effective 30 days after publication in the Federal Register. Copies of the regulation may be obtained by contacting the CFTC's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, 202-418-5100, or by accessing the CFTC's website, www.cftc.gov.
Last Updated: July 29, 2010
You Might Also Like...
- IHS Markit and Oliver Wyman Join Forces to Develop Risk Factor Modellability Service for FRTB
- CME Clearing Europe Approved as a Derivatives Clearing Organization by CFTC
- CFTC Grants CME Clearing Europe Registration as a Derivatives Clearing Organization
- Post-Trade Services Takes Centre Stage
- AxiomSL Opens Dubai Office as Part of Growing Middle Eastern Presence
- Numerix Introduces High Performance FRTB Solution
- Using Cloud to Address Collateral Challenges
- Creating a Stronger Financial System: New EU rules for the recovery and resolution of Central Counterparties