Cross-Margining Agreement Amendment Between FICC and CME
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The law extends cross-margining to customer accounts between the Fixed Income Clearing Corporation (FICC) and the Chicago Mercantile Exchange (CME). This modification allows eligible brokers to include customer accounts in cross-margining, enhancing portfolio risk management. Financial entities involved in securities and futures trading need to update compliance and operational processes to align with these changes.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Extension of cross-margining to customer accounts between FICC and CME
- Introduction of eligibility criteria for cross-margining customers
- New requirements for financial entities to adjust compliance processes
Obligations
What this law requires
Eligible BD-FCMs must enter into a Customer Cross-Margining Clearing Member Agreement to participate in the Cross-Margining Arrangement with the Clearing Organizations.
Eligible BD-FCMs must establish Customer Cross-Margining Accounts for recording Eligible Positions at Clearing Organizations, separate from Proprietary Cross-Margining Accounts.
Eligible BD-FCMs are required to maintain Customer Cross-Margining Accounts for recording Eligible Positions at the Clearing Organizations, and to designate each account as either a Customer Cross-Margining Account or a Proprietary Cross-Margining Account.
Joint Clearing Members must enter into a participant agreement with the Clearing Organizations and include this agreement as an appendix to the Third A&R Agreement.
Cross-Margining Customers must be classified as futures customers and hold their positions at FICC and associated funds in compliance with CFTC Regulation 1.3.