U.S. COMMODITY FUTURES TRADING COMMISSION

Division of Swap Dealer and Intermediary Oversight 

140 Broadway, New York, NY 10005 

Telephone: (646) 746-9834 

Facsimile: (646) 746-9937 

E-Mail: kpiccoli@cftc.gov

Kevin C. Piccoli 

Deputy Director 

To: All Futures Commission Merchants 

Attention: Chief Financial Officer 

Subject: Segregated and Secured Funds Maintained in a Combined Omnibus 

Account 

Date: September 28, 2012

The Division of Swap Dealer and Intermediary Oversight (“Division”) of the Commodity 

Futures Trading Commission (“Commission” or “CFTC”) is issuing this letter to futures 

commission merchants (“FCMs”)to clarify the record keeping requirements for customer 

segregated and secured funds maintained in carrying broker omnibus accounts. 

CFTC Regulations 1.20 and 30.7 require, among other things, that an FCM shall deposit 

customer funds under an account name which clearly identifies them as such and shows 

that they are segregated or secured pursuant to these aforementioned rules. The 

Commission Staff notes that a few FCMs have maintained a single combined customer 

omnibus account with a carrying FCM for segregated and secured customer trading and 

assets. The single account had memo entries to denote the amount of segregated versus 

secured assets. The Commission Staff has determined that a single account holding both 

segregated and secured assets, regardless of memo notation as to allocation of the assets, 

does not provide a clear delineation of the assets and, in the event of a bankruptcy, may put 

customer funds at risk. 

Therefore, in order to ensure clear recordkeeping in accordance with CFTC Regulations 

1.20 and 30.7, an FCM must maintain separate omnibus accounts with a carrying FCM for 

segregated and secured customer trading and assets. These accounts must be clearly titled 

as segregated 1.20 or secured 30.7 funds held for the benefit of customers pursuant to the 

aforementioned rules. Further, account acknowledgement letters must be obtained for 

each account.

Contacts 

If an FCM has questions on any of the foregoing, please feel free to contact Division staff 

listed in the table attached as Appendix A. 

cc: Joint Audit Committee
September 17, 2012 

DIVISION OF SWAP DEALER AND INTERMEDIARY 

OVERSIGHT 

APPENDIX A 

Regional 

Office 

Locations 

Contacts Location of FCM’s 

Principal Office 

Eastern Region 

140 Broadway, 

18

TH

Floor 

New York, NY 

10005-1146 

Ronald Carletta 

Associate Director 

Phone: 646-746-9726 

FAX: 646-746-9937 

E-Mail: rcarletta@cftc.gov

Universal E-Mail: 

examinations-bc-ny@cftc.gov 

All states east of the Mississippi River, except

Illinois, Indiana, Michigan, Ohio, and 

Wisconsin. 

Any location outside of the United States 

Central Region 

525 West 

Monroe Street 

Suite 1100 

Chicago, IL 

60661 

Melissa B. Hendrickson 

Associate Director 

Phone: 312-596-0661 

FAX: 312-596-0713 

E-Mail: 

mhendrickson@cftc.gov

Universal E-Mail: 

examinations-bc-ch@cftc.gov 

Illinois, Indiana, Michigan, Ohio, and 

Wisconsin 

Southwestern Region 

4900 Main 

Street, Suite 

500 

Kansas City, 

MO 64112

Thomas Bloom 

Associate Director 

Phone: 816-960-7710 

FAX: 816-960-7750 

E-Mail: tbloom@cftc.gov

Universal E-Mail: 

examinations-bc-kc@cftc.gov 

All states west of the Mississippi River 

Internet Websites 

Commodity Futures Trading Commission http://www.cftc.gov

Code of Federal Regulations (Title 17) http://ecfr.gpoaccess.gov