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ARTICLE · 02 SEPTEMBER 2026

Vertical Integration Under Scrutiny: CFTC's Proposed Conflicts And Affiliations Rule

K&L Gates
K&L Gates
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The Commodity Futures Trading Commission has proposed new regulations addressing conflicts of interest in vertically integrated market structures where exchanges and clearinghouses share common ownership with trading firms and intermediaries. The proposal introduces prescriptive safeguards including prohibitions on affiliate principal trading firms, enhanced disclosure requirements, and mandatory information barriers to address concerns about preferential treatment, misuse of nonpublic information, and mark

United StatesFinance and Banking
Tamika P. Bent
Tamika P. Bent
Martina Sandoval Iriarte
Martina Sandoval Iriarte
Sarah V. Riddell
Sarah V. Riddell

Three years after issuing a request for comment on affiliations between exchanges, clearinghouses, intermediaries, and other market participants,1 the Commodity Futures Trading Commission (the CFTC or the Commission) has proposed regulations addressing certain of these relationships (the Proposal). The Proposal would prohibit an affiliate principal trading firm from trading on an affiliated designated contract market (DCM), subject to a conditional exception for affiliate market makers. It also would introduce new requirements for self-regulatory organizations (SROs) and designated SROs (DSROs), and it would adopt enhanced guidance for DCMs and swap execution facilities (SEFs) with affiliated intermediaries, such as futures commission merchants (FCMs) or introducing brokers, or affiliated market makers that trade on their affiliated exchanges. The Proposal also would impose new requirements on derivatives clearing organizations (DCOs) with affiliated clearing members. Although some

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