FCMs clamour for formal rule on separate account margin
Costly compliance effort will be to no avail if CFTC relief expires in June 2021
Clearing firms are still seeking clarity on margin protections for separate accounts, more than six months after the US derivatives regulator set new conditions on ring-fencing and loss guarantees.
Institutional investors use separate accounts to allocate capital across multiple fund managers. Futures commission merchants (FCMs) ring-fence these accounts, so excess margin posted by one asset manager is not at risk if another firm running money for the same end-investor gets into trouble.
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