The Commodity Futures Trading Commission sought public comment on a proposal by the Chicago Mercantile Exchange to permit certain qualified entities guaranteed by a futures commission merchant-registered clearing member (termed "direct funding participants") to clear trades directly, without becoming full clearing members themselves. The objective of the CME’s proposal is to insulate a DFP from the risk of pro rata loss allocation in the case of the insolvency of an FCM clearing member where the DFP might otherwise hold its account. An FCM clearing member guaranteeing a DFP would be responsible for all financial obligations of the DFP; however, it would only have to set aside 4 percent of a DFP’s performance bond requirements as capital, as opposed to 8 percent if it carried the account directly (instead, the DFP would have to post 104 percent of ordinary performance bond requirements). The CFTC will accept comments through January 12, 2018. (Click here for additional details regarding CME’s proposal in the article “One More Time – CME Group Resubmits Direct Funding Participant Proposal to CFTC” in the April 23, 2017 edition of Bridging the Week.)