CFTC Withdraws Guidance on Derivatives Clearing Organization Recovery and Wind-Down Plans

The Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk has announced the immediate withdrawal of regulatory guidance previously issued under CFTC Letter No 16-61. The withdrawn letter, titled "Recovery Plans and Wind-down Plans Maintained by Derivatives Clearing Organizations and Tools for the Recovery and Orderly Wind-down of Derivatives Clearing Organizations," provided staff guidance for derivatives clearing organizations (DCOs). According to the withdrawal notice, the guidance is no longer necessary and is duplicative. Systemically important DCOs and DCOs that elect to be subject to Subpart C of Part 39 of the CFTC’s regulations are already required to maintain viable recovery and wind-down plans. These entities must comply with risk management requirements established under the Commodity Exchange Act, CFTC regulations, and relevant international standards, rendering the standalone guidance in Letter No 16-61 redundant.