The Joint Audit Committee (JAC) has announced that it will maintain its current restrictions on trading while undermargined. As background, the JAC Margins Handbook provides that if an account is undermargined for an unreasonable time, a futures commission merchant may only accept orders that reduce the risk of existing positions in the account. For these purposes, “reasonable time” is defined as less than five business days for customers and less than four business days for noncustomers and omnibus accounts. The JAC has determined to maintain this reasonable time definition.
JAC Regulatory Alert 14-07 is available here.
The JAC also has published a helpful summary of the Commodity Futures Trading Commission’s residual interest requirements. JAC Regulatory Alert 14-06 is available here.