CFTC rule change sparks dealer-client margin scuffle

FCMs fear “race to the bottom” as funds lobby dealers for lower margin status

Photo: John Harrington

Clearing banks are up in arms after a seemingly arcane change to the way US regulations categorise their clients for the purposes of margining led to large funds lobbying for their requirements to be dropped by as much as 9% versus previous levels.

On January 27, an amendment to US Commodity Futures Trading Commission (CFTC) Regulation 39.13(g)(8)(ii) – which governs the way clearing houses and futures commission merchants (FCMs) should treat clients when determining base margin requirements –

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