Commodity Futures Trading Commission 

 Office of Public Affairs 

 Three Lafayette Centre 

 1155 21st Street, NW 

 Washington, DC 20581 

 www.cftc.gov

Proposed Rule Regarding Requirements for 

Processing, Clearing, and Transfer of Customer Positions 

The Commodity Futures Trading Commission is proposing rules to supplement previously proposed rules for swap 

dealers, major swap participants, futures commission merchants, swap execution facilities, designated contract 

markets, and derivatives clearing organizations, with the objective of facilitating the prompt clearing of swaps and, 

upon customer request, the timely transfer of customer positions and related funds.

Proposed rules to establish time frames for submission of transactions for clearing 

The Commission is proposing rules that would set forth the required time frame for a swap dealer (SD), major swap 

participant (MSP), futures commission merchant (FCM), swap execution facility (SEF), and designated contract 

market (DCM) to submit contracts, agreements, or transactions to a derivatives clearing organization (DCO) for 

clearing. 

SD and MSP submission of swaps for clearing (through a clearing member FCM, as appropriate) pursuant to 

proposed § 23.506: 

• Swaps subject to mandatory clearing – Under proposed § 23.506(b)(1), an SD or MSP would have to submit 

the swap for clearing as soon as technologically practicable following execution, but not later than the close 

of business on the day of execution. 

• Swaps not subject to mandatory clearing – Under proposed § 23.506(b)(2), if cleared, such swaps would 

have to be submitted for clearing not later than the next business day after execution of the swap or the 

agreement to clear, if later than execution. 

SEFs and DCMs would submit swaps for clearing immediately upon execution. 

Proposed rules to establish time frames for processing and clearing transactions 

The Commission is proposing a new § 39.12(b)(7) to clarify a DCO’s timing for processing and clearing contracts, 

agreements, and transactions, including swaps. 

• Transactions executed on a SEF or DCM – A DCO must accept for clearing, immediately upon execution, 

all transactions listed for clearing by the DCO. 

• Swaps not executed on a SEF or DCM and subject to mandatory clearing – A DCO must accept for 

clearing, upon submission to the DCO, all swaps that are listed for clearing by the DCO. 

• Swaps not executed on a SEF or DCM and not subject to mandatory clearing – A DCO must accept for 

clearing, no later than the close of business on the day of submission to the DCO, all swaps that are listed 

for clearing by the DCO. 

Coordination among registrants to facilitate prompt and efficient transaction processing 

Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 
Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080 

SDs and MSPs. Proposed § 23.506(a)(2) would require SDs and MSPs to coordinate with each DCO to which the 

SD or MSP, or its clearing member, submits transactions for clearing, to facilitate prompt and efficient swap 

transaction processing. 

SEFs. Proposed § 37.702(b)(2) would require a SEF to coordinate with each DCO to which it submits transactions 

for clearing, in the development of rules and procedures to facilitate prompt and efficient transaction processing 

(implements SEF Core Principle 7, Financial Integrity of Transactions). 

 

DCMs. Proposed § 38.601(b) would require a DCM to coordinate with each DCO to which it submits transactions 

for clearing, in the development of rules and procedures to facilitate prompt and efficient transaction processing 

(implements DCM Core Principle 11, Financial Integrity of Transactions). 

DCOs. Proposed § 39.12(b)(7)(i) would require each DCO to coordinate with each SEF and DCM that lists for 

trading a product that is cleared by the DCO, in developing rules and procedures to facilitate prompt and efficient 

processing of all contracts, agreements, and transactions submitted to the DCO for clearing (implements DCO 

Core Principle F, Participant and Product Eligibility). 

Supplemental rules to implement DCO Core Principle F 

To supplement previously proposed rules, the Commission is: 

• re-proposing § 39.12(b)(2) to clarify the role of the DCO in establishing the terms and conditions for swaps 

that it accepts for clearing; 

• proposing a new § 39.12(b)(4) that would prohibit a DCO from requiring that one of the original executing 

parties to a swap must be a clearing member in order for the transaction to be eligible for clearing; and 

• re-proposing § 39.12(b)(3) (renumbered as § 39.12(b)(5)) to clarify a DCO’s role and objectives in selecting 

contract units for clearing that are smaller than the contract units in which trades submitted for clearing 

were executed. 

Prompt transfer of customer positions and related funds upon customer request 

The Commission is proposing a new § 39.15(d) to implement DCO Core Principle F (Treatment of Funds), 

requiring a DCO to have rules providing that, upon the request of a customer and subject to the consent of the 

receiving clearing member, the DCO will promptly transfer all or a portion of such customer’s portfolio of 

positions and related funds from the carrying clearing member to another clearing member, without requiring the 

close-out and re-booking of the positions prior to the requested transfer. The requirement that the DCO not 

require close-out and re-booking of positions eliminates a source of unnecessary delay and market disruption, and 

conforms with current futures industry practices.