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The notice proposes definitional and procedural changes to Parts 1 and 39, requirements for submitting portfolio margining
rules for prior approval, requirements for a Derivatives Clearing Organization’s (“DCO”) chief compliance officer (“CCO”),
and rules to implement DCO Core Principles A (compliance), H (rule enforcement), N (antitrust considerations), and R (legal
risk).
The Commission is proposing to amend certain definitions in § 1.3 and § 39.1 to make the definitions consistent with the
terminology currently used in the Commodity Exchange Act (“CEA”), as amended by the Dodd-Frank Act, and to provide
clarity and legal certainty.
The proposed rules would amend § 39.3 to streamline the DCO application process by eliminating the 90-day expedited
application review period. Over the past nearly 10 years, the Commission has determined that a 90-day period is not
practicable. All applications would be reviewed on a 180-day schedule.
The proposed amendments would clarify the procedures to be followed by a DCO when requesting a transfer of its DCO
registration due to a corporate change. Currently, there are no rules on this topic, and the proposed rules would provide legal
certainty.
In accordance with Section 713 of the Dodd-Frank Act, proposed § 39.4 would require a DCO to obtain Commission
approval to provide clearing and settlement services for a futures portfolio margining account that carries securities.
Section 725(b) of the Dodd-Frank Act requires each DCO to designate a CCO and further specifies the duties of the CCO.
Proposed § 30.10 would implement this provision.
Finally, the proposed rulemaking would set forth the rules to implement DCO Core Principles A (compliance), H (rule
enforcement), N (antitrust considerations) and R (legal risk). The rules would promote effective compliance functions with
the CEA and Commission regulations and help create legal certainty regarding the clearing and settlement functions of a
DCO.
Comments on the rules must be submitted within 60 days of the publication of the proposal in the Federal Register.