CFTC Proposes New Rules on Affiliations and Conflicts of Interest Across Regulated Entities

The Commodity Futures Trading Commission (CFTC) has published a Notice of Proposed Rulemaking (NPRM) seeking public comment on regulatory amendments addressing affiliations among CFTC-regulated entities. The proposed rules target affiliations between various market entities, including derivatives clearing organizations (DCOs), designated contract markets (DCMs), swap execution facilities (SEFs), futures commission merchants (FCMs), and other participants such as market makers. To address perceived and potential conflicts of interest arising from these structures, the Commission is proposing amendments to Part 37, Part 38, and Part 39 of its regulations, alongside Commission regulations 1.52 and 1.55. According to CFTC Chairman Michael S. Selig, the initiative aims to establish principles-based regulations for vertically integrated market structures to support innovation in U.S. derivatives markets while bolstering market integrity without imposing excessive compliance costs on registrants. The Commission confirmed that public comments on the proposed rulemaking will be accepted for 60 days following its publication in the Federal Register.