US CFTC to Publish Rule on Vertically Integrated Models by Summer

Commodity Futures Trading Commission’s Plan

The U.S. Commodity Futures Trading Commission is set to release a draft rule for public comments by summer regarding vertically integrated models. These models involve a broker, a clearinghouse, and an exchange operating under a single holding company. The announcement was made by Chairman Rostin Behnam during the Futures International Association conference in Boca Raton, Florida.

Regulation on Integrated Structures

Behnam highlighted the need for regulations to ensure that vertically integrated structures are adequately separated from other entities. The CFTC’s decision to approve Bitnomial’s plan to act as its own registered clearinghouse marked a significant shift in the commodities market. As integrated structures become more common, the CFTC aims to publish a finalized rule within the next year after gathering feedback.

Trend Towards Integration

According to Behnam, the rise of integrated structures has transformed from a one-off occurrence to a growing trend in the market. This shift has prompted the need for a comprehensive policy to govern such setups. Behnam emphasized the importance of balancing the flexibility of integrated models with safeguards to prevent conflicts of interest.

Ensuring Market Integrity

The CFTC’s move to introduce regulations for vertically integrated models reflects its commitment to maintaining market integrity and transparency. By addressing the evolving landscape of market structures, the commission aims to foster a competitive yet secure environment for participants.