The U.S. Commodity Futures Trading Commission (CFTC) today unanimously approved a final rule removing the December 31, 2018 automatic termination of the phased-in compliance period for the Residual Interest Deadline for futures commission merchants (FCMs).
The final rule amends Commission Regulation 1.22 by removing December 31, 2018 as the automatic termination date of the phased-in compliance period. As a result, the Residual Interest Deadline will remain 6:00 p.m. Eastern Time pending the possibility of future Commission rulemaking.
Regulation 1.22 requires an FCM to compute the aggregate amount of its futures customers’ undermargined accounts as of the close of business each day. Under a phased-in compliance schedule in Regulation 1.22, an FCM is required to maintain a sufficient amount of its own funds (residual interest) in the customer segregated accounts by the Residual Interest Deadline of 6:00 p.m. Eastern Time on the next business day to cover the customer’s undermargined amounts that were computed as of the close of business on the previous day.
The phased-in compliance schedule would have revised the Residual Interest Deadline to the time of the daily settlement cycle no later than December 31, 2018. Today’s approval removes the December 31, 2018 automatic termination date from Regulation 1.22.
For the official announcement from the CFTC, click here.