November 12 2014On October 23 2014 the US Commodity Futures Trading Commission's (CFTC) Division of ...

1. CFTC issues interpretative guidance on customer margin
deposits
November 12 2014
On October 23 2014 the US Commodity Futures Trading Commission's (CFTC) Division of Swap
Dealer and Intermediary Oversight issued an interpretation disclosing that a futures commission
merchant (FCM) may credit a customer's futures, foreign futures and/or cleared swaps trading
account for a margin payment upon the FCM's initiation of a withdrawal from the customer's bank
account using the Automated Clearing House (ACH) transaction system.
A written agreement between the customer and the FCM would authorise the latter to institute an
ACH transaction to withdraw funds from the customer's bank account to meet a margin call. CFTC
regulations do not require an FCM to delay crediting the relevant customer's trading account until
the check clears the customer's bank account.
The interpretation pertains to CFTC Regulations 1.22, 22.2 and 30.7 and is aligned with a previous
staff interpretation regarding the FCM's procedure for recording checks deposited by customers for
margin payments.
For further information on this topic please contact Donna M Parisi, Geoffrey B Goldman or Azam H
Aziz at Shearman & Sterling LLP by telephone (+1 212 848 4000), fax (+1 212 848 7179) or email
(dparisi@shearman.com, geoffrey.goldman@shearman.com or aaziz@shearman.com). The Shearman
& Sterling website can be accessed at www.shearman.com.
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