Commodity Futures Trading Commission: Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations
GAO-14-198R: Nov 27, 2013
GAO reviewed the Commodity Futures Trading Commission's (Commission) new rule on "Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations." GAO found that (1) the rule adopts new regulations and amends existing regulations to require enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures, and auditing and examination programs for futures commission merchants ("FCMs"). The regulations also address certain related issues concerning derivatives clearing organizations ("DCOs") and chief compliance officers ("CCOs"). The final rule will afford greater assurances to market participants that: (1) customer segregated funds, secured amount funds, and cleared swaps funds are protected; (2) customers are provided with appropriate notice of the risks of futures trading and of the FCMs with which they may choose to do business; (3) FCMs are monitoring and managing risks in a robust manner; (4) the capital and liquidity of FCMs are strengthened to safeguard their continued operations; and (5) the auditing and examination programs of the Commission and the self-regulatory organizations ("SROs") are monitoring the activities of FCMs in a prudent and thorough manner; and (2) Commission complied with the applicable requirements.