The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight issued a no-action letter authorizing futures commission merchants to withdraw excess residual interest from cleared swaps customer accounts prior to a formal next day segregation calculation, as currently required under one of its regulations (click here to access CFTC Rule 22.17(b)), to the extent the withdrawal is in response to margin deposits provided by cleared swaps customers to reduce their undermargined amounts since the firm’s last formal segregation computation – subject to strict conditions. (Prior to a time of clearing settlement with a derivatives clearing organization, an FCM must maintain a residual interest that at least equals the amount by which each cleared swaps customer is undermargined.) Among the conditions is that a withdrawal may not cause the FCM to hold less than 110 percent of its current targeted residual interest balance in cleared swaps customer accounts. DSIO also provided certain reporting relief regarding such withdrawals in the same no-action letter.