Commodity Futures Trading Commission Issues Staff Advisory on Risks of Expanding DCO Clearing of Digital Assets
Highlights
Commodity Futures Trading Commission Division of Clearing and Risk is focused on the potential heightened risks associated with digital asset clearing activities
Derivatives clearing organizations (DCO) registrants’ and applicants’ compliance with system safeguards, physical delivery, and conflicts of interest procedures will be under increased scrutiny
Risk management procedures must be expressly articulated and enforced by DCOs
In recent years, derivatives clearing organization (DCO) registrants and applicants have shown increased interest in expanding DCO services. In response, the Commodity Futures Trading Commission Division of Clearing and Risk (DCR) recently issued a staff advisory to all DCOs and applicants about its focus on potentially heightened risks associated with new services and products, especially those pertaining to digital assets.
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