On June 2, the Commodity Futures Trading Commission proposed to exempt Federal Reserve Banks that provide customer accounts to systematically important derivatives clearing organizations (SIDCOs) from Sections 4d and 22 of the Commodity Exchange Act (CEA).

As a result, Federal Reserve Banks would be permitted to hold cash, securities and property deposited into a customer account by a SIDCO in accordance with the standards that otherwise apply to Federal Reserve Banks, including permitting SIDCOs to maintain customer accounts with Federal Reverse Banks pursuant to the standard of liability set forth in the Federal Reserve Bank Governing Documents. In addition, the proposal would exempt Federal Reserve Banks from liability with respect to the exempted requirements under the private right of action for damages pursuant to Section 22 of the CEA.

The proposal does, however, require a Federal Reserve Bank to segregate customer funds from proprietary funds of a SIDCO, and to reply to any request from CFTC staff for information regarding the SIDCO account.

Comments may be submitted by fax or email to the Office of Information and Regulatory Affairs until July 5.

The proposed order and request for comment is available here.