US CFTC to Publish Rule on Vertically Integrated Models by Summer, Says Chair
Chairman Behnam Announces Draft Rule for Vertically Integrated Models
The U.S. Commodity Futures Trading Commission is set to release a draft rule for comments by summer regarding vertically integrated models. This structure involves a broker, clearinghouse, and exchange under a holding company, as revealed by Chairman Rostin Behnam on Tuesday.
New Regulations Aimed at Walling Off Entities
Behnam emphasized the necessity for the rule to ensure that these integrated models are adequately separated from other entities. He expressed the importance of maintaining a balance between allowing such structures and implementing necessary conditions to prevent potential conflicts of interest.
Bitnomial Leads the Way in Integrated Market Structures
In a groundbreaking move, the CFTC approved a plan from Bitnomial, a Chicago cryptocurrency derivatives exchange, to operate as its own registered clearinghouse. This decision marked a significant shift in the commodities market, signaling a shift towards more integrated market structures.
Increasing Trend in Integrated Market Structures
Chairman Behnam highlighted the growing prevalence of integrated structures in the market, prompting the CFTC to expedite the drafting process of the new rule. The aim is to finalize the rule within the next year after receiving feedback from industry stakeholders.
Policy Shift in Response to Market Trends
Behnam noted the shift from isolated instances to a broader trend in integrated market structures, prompting the need for a clear policy framework. The decision to establish guidelines for vertically integrated models reflects the evolving landscape of the commodities market.
