Back To The Drawing-Board: The CFTC Re-Proposes Rules To Codify Letter 19-17

Just under 10 years ago, the Joint Audit Committee launched a shot across the bow of the futures industry with this seemingly innocuous observation in a Regulatory Alert:

"Additionally, all accounts of the same beneficial owner within the same regulatory account classification (i.e., customer segregated, customer secured, cleared swaps customer, or noncustomer) should be combined for margin purposes. FCMs should be reminded that when determining an account's margin funds available for disbursement, all accounts of the same beneficial owner, even if under different control, within the same regulatory account classification must be combined."

JAC Regulation Alert 14-03 (available here). The Joint Audit Committee – a club of self-regulatory organizations that, in practice, serves as a proxy for the regulatory preferences of the Chicago Mercantile Exchange's Financial and Regulatory Surveillance Department – was telling the industry, in essence, that the