New Futures Rules IB-now what?

[twende]

Joint Proposed Rule:
Customer Margin Rules Relating to Security Futures
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 41

RIN 3038-AB71

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 242

[Release No. 34-44853; File No. S7-16-01]

RIN 3235-A122

Customer Margin Rules Relating to Security Futures

AGENCIES: Commodity Futures Trading Commission and Securities and Exchange Commission.

ACTION: Joint proposed rules.

SUMMARY: The Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC") (collectively, "Commissions") are proposing rules that would establish margin requirements for security futures. The proposed rules would preserve the financial integrity of markets trading security futures, prevent systemic risk, and require that the margin requirements for security futures be consistent with the margin requirements for comparable exchange traded option contracts.

DATES: Comments must be received on or before [insert date that is 30 days after date of publication in the Federal Register].

ADDRESSES: Comments should be sent to both agencies at the addresses listed below.

CFTC: Comments should be sent to the Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, Attention: Office of the Secretariat. Comments may be sent by facsimile transmission to (202) 418-5521, or by e-mail to secretary@cftc.gov. Reference should be made to "Customer Margin for Security Futures." All comment letters will be posted, as submitted, on the CFTC's Internet web site (http://www.cftc.gov).

SEC: Persons wishing to submit written comments should send three copies to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. Comments also may be submitted electronically at the following e-mail address: rule-comments@sec.gov. All comment letters should refer to File No. S7-16-01; this file number should be included on the subject line if e-mail is used. Comment letters received will be available for public inspection and copying in the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549-0102. Electronically submitted comment letters will be posted on the SEC's Internet web site (http://www.sec.gov). The SEC does not edit personal identifying information, such as names or e-mail addresses, from electronic submissions. Submit only the information you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT:

CFTC: Phyllis P. Dietz, Special Counsel; or Michael A. Piracci, Attorney, Division of Trading and Markets, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581. Telephone: (202) 418-5000. E-mail: (PDietz@cftc.gov); or (MPiracci@cftc.gov).

SEC: Hong-anh Tran, Special Counsel, at (202) 942-0088; Jennifer Colihan, Special Counsel, at (202) 942-0735; Bonnie Gauch, Attorney, at (202) 942-0765; and Lisa Jones, Attorney, at (202) 942-0063, Division of Market Regulation, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-1001.

SUPPLEMENTARY INFORMATION:

The CFTC is proposing Rules 41.43 through 41.48, 17 CFR 41.43 through 41.48, and the SEC is proposing Rules 400 through 404, 17 CFR 242.400 through 242.404, under authority delegated by the Federal Reserve Board pursuant to the Exchange Act.1


http://www.sec.gov/rules/proposed/34-44853.htm

 

[BigEd]

Just picked up on what's going on. My question is, "What problem is being addressed here?" Is this to keep brokerages from going under from a risk standpoint? Or to keep equities brokers afloat since traders are moving from equites to futures (e-minis)? Or another example of saving us from ourselves?

Seems like my government has enough to do without meddling in my business.

Anyone with a clue, please help me out. I'm sure I'm over-reacting

???

 

[tntneo]

I think some are very nervous with the coming of single stock futures. After all these were banned for years, so the lobby was powerful. Now this lobby has to try to protect its interest again.
Probably it will be unfair. But that`s part of the game. All I am asking is this : stop changing the rules for while !
so we can make good decisions and start doing business !

I am not pro single stock futures but I am for freedom of choice. If traders want to trade them or nasdaq stocks directly or whatever it is fine by me, just stop changing the rules (single stock futures are being introduced, so I realize it is not really a matter of `changes`). I stick to eminis. please leave them and us alone !

neo

 

[Htrader]

So if I understand this right, does this mean that there will be no leverage of single stock futures like there are in index futures?

 

[michaelday]

If you read the link you will see that they are talking about margin of 20%. This is already the case with Nasadaq 100 futures so I think there is nothing to worry about. It may be directed towards brokers who offer lower margins than those assigned by exchanges. Also it has nothing to do with commodities, currency nor interest rates futures.
And as far as single stock futures go 20% is good margin for volatile Nasdaq stocks.

 

[JayS]

Its says: "margin requirements for security futures be consistent with the margin requirements for comparable exchange traded option contracts".

Most in the futures industry predicted and assumed this from the beginning. They believe they will have the same margin as short options, in the range of 20%-25%.

It ends up in the middle so to speak, futures margins range from 5%-10% while stocks/equites margin is 50% for non-prof.