The Commodity Futures Trading Commission has adopted amendments to the minimum adjusted net capital requirements for futures commission merchants (FCMs) and introducing brokers (IBs). Under the amendments, the minimum dollar amount of adjusted net capital has been raised to $1 million for an FCM and $45,000 for an IB. The amended rules also include customer and noncustomer positions in cleared over-the-counter (OTC) derivative instruments (whether cleared in the United States or abroad) in the calculation of an FCM’s “risk-based” adjusted net capital requirement, and require FCMs to take charges to their regulatory capital (haircuts) for cleared OTC positions that are carried in proprietary accounts in a manner comparable to those that are required for exchange-traded futures and options.
In response to comments received to the CFTC’s original rule proposal, the amended rules increase the risk margin requirement for noncustomer positions to equal the requirement for customer positions (8%), in lieu of increasing the requirement for both customer and noncustomer positions to 10%, as originally proposed. The CFTC’s original proposal also included a request for comments as to the advisability of increasing the CFTC’s adjusted net capital requirements for FCMs that are also securities broker-dealers to an amount equal to the sum of the applicable CFTC and Securities and Exchange Commission capital requirements. The CFTC received no comments in favor of this potential change, and has proposed no further amendments to these requirements.
The rule changes will take effect on March 31.
The Federal Register release containing the final rules is available here.