A special committee of representatives from the futures industry’s SROs proposed a series of recommendations for changes to SRO rules and regulatory practices.  The recommendations include: 

  • Requiring all FCMs to file daily segregation and secured reports, which will provide SROs with an additional means to monitoring firm compliance;
  • Requiring all FCMs to file bimonthly Segregation Investment Detail Reports, which reflect how customer segregated funds and secured funds are invested and where they are held;
  • Performing more periodic spot checks to monitor FCM compliance with segregation and secured requirements; and
  • Requiring a principal to approve any disbursement of customer segregated and secured funds not made for the benefit of the customer and that exceed 25% of the firm’s excess segregated or secured funds.  The firm must also provide immediate notice to the SROs.

Given how serious the NFA has been treating the issue of customer segregated funds, it is possible that at least some form of these recommendations could be made into final rules over the next several months.