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Tuesday, March 20, 2012

CFTC Approves Customer Clearing Documentation Rule

The CFTC today has approved a final rule in regards to customer clearing documentation: timing of acceptance for clearing, and clearing member risk management. The final rule is meant to help broaden market access and promote competition in the swaps markets while lowering risk in these markets.

If finalized the rule would:
  • Establish requirements for the documentation between an FCM and its customers and between a swap dealer and its counterparties; 
  • Set standards for the timely processing of trades that minimize the time between submission and acceptance or rejection of trades for clearing; 
  • Require bunched orders for swaps executed as a block to be immediately accepted into clearing and allocated into individual accounts later in the day; and
  • Strengthen the risk management procedures of clearing members to enhance market integrity.

Read more about the meeting and rule.

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