Federal Register: CFTC Supplements Bankruptcy Proposal

A CFTC-proposed supplement to an existing proposal to amend the regulations governing commodity broker bankruptcies was published in the Federal Register.

As previously covered, the CFTC proposed amendments to "comprehensively update" Part 190 ("Bankruptcy") regulations. The supplement comes in response to public comment on the original proposal regarding the treatment under Proposed Rule 190.14(b) of a derivatives clearing organization's ("DCO") operations following insolvency of the DCO. In particular, the supplement would amend the proposal to stay termination of systemically important DCO contracts for a brief period after bankruptcy (to facilitate a Title II resolution), but without undermining the netting status of those contracts under relevant bank capital and related rules.