In an interpretive announcement issued by its Division of Swap Dealer and Intermediary Oversight, the U.S. Commodity Futures Trading Commission (CFTC) announced that futures commission merchants (FCMs) are not waving protection of client funds, if the FCMs deposits them with a U.K. investment firm that is in subject to the U.K. Financial Conduct Authority’s client money rules or the U.K. Prudential Regulation Authority’s regulations on bank deposits.
The decision results from multiple confirmation requests by FCMs to make sure that they were not waiving protections to customer funds if they elected to deposit them with U.K. investment firms that are licensed banks as bank deposits.
Under the CFTC’s Regulation 30.7, which addresses how FCMs may hold customer deposits for transactions on foreign markets, the regulator states that FCMs must deposit customer funds under the laws and regulations of the local jurisdiction that provides the greatest degree of protection to such funds, according to the regulator. Also, FCMs may not waive any of the protection afforded to customer funds provided by the local jurisdiction.
CFTC Approves Qualified U.K. Deposits
In an interpretive announcement issued by its Division of Swap Dealer and Intermediary Oversight, the U.S. Commodity Futures Trading Commission (CFTC) announced that futures commission merchants (FCMs) are not waving protection of client funds, if the FCMs deposits them with a U.K. investment firm that is in subject to the U.K. Financial Conduct Authority’s client money rules or the U.K. Prudential Regulation Authority’s regulations on bank deposits.
« Rothschild Larch Lane Liquid Alts Fund Selects Morgan Stanley as PB