FCMs clamour for formal rule on separate account margin

Costly compliance effort will be to no avail if CFTC relief expires in June 2021

CFTC
Photo: John Harrington

Clearing firms are still seeking clarity on margin protections for separate accounts, more than six months after the US derivatives regulator set new conditions on ring-fencing and loss guarantees.  

Institutional investors use separate accounts to allocate capital across multiple fund managers. Futures commission merchants (FCMs) ring-fence these accounts, so excess margin posted by one asset manager is not at risk if another firm running money for the same end-investor gets into trouble.

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