Part 5: The Margin Adequacy Requirement of Proposed CFTC Regulation §1.44
The BR Derivatives Report
This post continues our multi-part series on proposed CFTC Regulation §1.44 (the “Proposed Rule”).
If adopted, the Proposed Rule will require every futures commission merchant (“FCM”) to ensure that a customer does not withdraw funds from its account with the FCM if the post-withdrawal balance of that account would be insufficient to meet the initial margin requirements applicable to that customer. The proposing release published by the U.S. Commodity Futures Trading Commission (the “CFTC”) refers to this requirement as a “Margin Adequacy Requirement.”
This post will provide additional information about this requirement, which arguably is the keystone of the proposal.
To read the full post, please visit our BR Derivatives Report blog.