The U.S. Commodity Futures Trading Commission’s May 17 advisory that some prime brokers might have to register as derivatives clearing organizations (DCOs) is a “huge deal” for the industry, both in terms of the burden imposed on individual firms and the potential impact to a global market with notional value exceeding $600 trillion.
That’s the opinion of Maggie Sklar, Partner, Banking and Financial Services at Davis Wright Tremaine and formerly Senior Counsel to the Chairman at the CFTC.
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The May 17 CFTC staff advisory “encourages entities using prime brokerage arrangements that provide credit substitution on a centralized basis to examine the specific nature of their activities for the potential need to register as a derivatives clearing organization (DCO).”
The full article is available at https://www.tradersmagazine.com/am/for-some-prime-brokers-dco-registration-looms-large/