Alert November 15, 2011

CFTC Adopts Final Rules for Core Principles Governing Derivatives Clearing Organizations

The CFTC adopted final rules that establish the regulatory standards for compliance with the Core Principles for derivatives clearing organizations (“DCOs”) set forth in Section 5b of the Commodity Exchange Act.  Among other things, the CFTC’s action also updates and adds related definitions; adopts implementing rules for DCO chief compliance officers (“CCOs”); revises procedures for DCO applications including the required use of a new Form DCO; adopts procedural rules applicable to the transfer of a DCO registration; and adds requirements for approval of DCO rules establishing a portfolio margining program for customer accounts carried by a futures commission merchant that is also registered as a securities broker‑dealer.  The final rules generally become effective January 12, 2012 with delayed compliance dates in certain instances.