Commodity Futures Trading Commission May 2009 – Federal Register Recent Federal Regulation Documents

On March 24, 2009, the Commodity Futures Trading Commission (``Commission'') published a concept release on whether to eliminate the bona fide hedge exemption for certain swap dealers and create a new limited risk management exemption from speculative position limits. Comments on the proposal were originally due by May 26, 2009. Now, at the request of interested parties, the Commission is extending the comment period to June 16, 2009.

The Commodity Futures Trading Commission (``Commission'') proposes to amend its regulations that prescribe minimum adjusted net capital (``ANC'') requirements for futures commission merchants (``FCMs'') and introducing brokers (``IBs''). The proposed amendments would increase the required minimum dollar amount of ANC, as defined in the regulations, that an FCM must maintain from $250,000 to $1,000,000. The proposed amendments also would increase the required minimum dollar amount of ANC that IBs must maintain from $30,000 to $45,000. The Commission also is proposing to amend the computation of an FCM's margin-based minimum ANC requirement to incorporate into the calculation customer and noncustomer positions in over-the-counter derivative instruments that are submitted for clearing by the FCM to derivatives clearing organizations (``DCOs'') or other clearing organizations (``cleared OTC derivative positions''). In addition, the Commission is proposing to amend the regulations to require that FCM proprietary cleared OTC derivative positions be subject to capital deductions in a manner that is consistent with the capital deductions required by the Commission's regulations for FCM proprietary positions in exchange-traded futures contracts and options contracts. Further, the Commission proposes to amend the FCM capital computation to increase the applicable percentage of the total margin-based requirement for futures, options and cleared OTC derivative positions in customer accounts from eight percent to ten percent and in noncustomer accounts from four percent to ten percent. Lastly, the Commission solicits public comments on the advisability of increasing the ANC requirement for FCMs that are also securities brokers and dealers by the amount of net capital required by the Securities and Exchange Commission (``SEC'') Rule 15c3-1(a).