CFTC Streamlines Trader Margins: Wall Street Gets Incremental Ease
Published Date: 4/20/2026
Rule
Summary
Starting April 15, 2026, certain broker-dealers who also clear futures at both the Chicago Mercantile Exchange and the Fixed Income Clearing Corporation can combine their customers’ margin funds into one account. This change helps these firms manage money more efficiently and could save customers and firms some cash by reducing extra margin requirements. It’s a smart move to make trading smoother and safer for everyone involved!
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
Customers Can Cross-Margin at FICC
Starting April 15, 2026, certain broker-dealers that are also registered futures commission merchants (BD-FCMs) may deposit customers' FICC-cleared U.S. Treasury securities positions and associated margin at the Fixed Income Clearing Corporation (FICC) and carry those positions in the BD-FCM's futures account so they can be cross-margined with CME futures positions. The change allows margin to be calculated across the combined portfolio to account for risk offsets, which can reduce initial margin requirements (the release includes an illustrative example where initial margin fell from $343.24 million to $68.648 million after cross-margining).
Customers Must Sign Subordination Agreement
Under the program, a cross-margining customer must agree to have its FICC-held securities and margin carried in a futures account and sign a subordination agreement stating that its claim for return of the FICC-held securities (XM Securities Customer Property) will not receive customer treatment under the Exchange Act or the Securities Investor Protection Act (SIPA) and that it will not be treated as "customer property" under section 741 of the Bankruptcy Code in a BD-FCM liquidation. This is a required customer election to participate in the cross-margining arrangement.
Bankruptcy Priority Protected Under CFTC Rules
The Commission concludes that in the event of a BD-FCM bankruptcy, cross-margined customers' claims to the FICC-held securities and margin will be treated as futures customer property under Commission bankruptcy rules (Part 190) and will form allowable net equity claims in the futures account class, giving those customers the same priority as other futures customers. The Order requires BD-FCMs and FICC to adopt specific book-entry and accounting steps so that these cross-margined assets are included in the Part 190 net-equity calculation.
Where Cross-Margin Cash Will Be Held
FICC will hold cash margin collected for cross-margining customers either in a Federal Reserve Bank of New York (FRBNY) segregated account or in a commercial bank account insured by the Federal Deposit Insurance Corporation (FDIC), with the FRBNY account potentially co‑locating cross-margining collateral and existing FICC segregated customer margin. The Order requires FICC to maintain these funds in separate, clearly labeled accounts on its books and to follow Commission segregation rules.
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