The Commodity Futures Trading Commission has proposed to amend its Bankruptcy Rules, 17 CFR Part 190, to establish cleared over-the-counter derivatives as a separate account class for the purpose of calculating “net equity” and “allowed net equity” for each customer in the event of the bankruptcy of a futures commission merchant. The proposed amendment would define “cleared OTC derivatives” to include only those positions, and funds deposited to margin, guarantee or secure such positions, that are required to have been (i) segregated in accordance with a rule, regulation or order issued by the Commission, or (ii) held in a separate account for cleared-only contracts in accordance with the rules or bylaws of a derivatives clearing organization. The proposed amendment further provides that, to the extent cleared OTC derivatives are permitted to be held in a customer segregated account, the positions will be treated as futures for purposes of calculating customer net equity.

Comments must be submitted on or before September 14.

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