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FTX.US Derivatives Seeks CFTC Approval to Clear Margin Trades Directly for Customers
The company says the change would allow customers to assess and respond to derivatives risks in real time.
Updated May 11, 2023, 4:03 p.m. Published Mar 10, 2022, 5:43 p.m.
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FTX.US Derivatives has asked the Commodity Futures Trading Commission to allow the trading platform to clear margined derivatives trades directly for customers.
In a tweet thread on Thursday morning, FTX.US President Brett Harrison explained that FTX U.S. Derivatives’ current derivatives clearing organization license requires full collateralization of derivative positions through an intermediary. FTX’s application seeks to amend that to allow for direct-to-consumer margined derivatives trading for retail and institutional customers.
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The change would allow derivatives risks to be “transparently assessed and mitigated in real time” because of FTX’s almost continuous setting of margin levels, Harrison said.
“As market-moving news over the last two weeks has demonstrated, large amounts of time between margining periods causes risk to build up in the system, resulting in market swings at next open and lack of clarity over participants’ ability to cover their capital requirements,” Harrison wrote.
The CFTC has acknowledged FTX.US Derivatives' request and asked for public comments to be submitted on or before April 11.
1/ The @CFTC has begun holding a 30-day public comment period on FTX US Derivatives’s margin application. Here is what our application contains, what it means, and broader implications for derivatives market structure:https://t.co/ZGGleIuUWD
— Brett Harrison (@BrettHarrison88) March 10, 2022
Read more: FTX US Joins International Swaps and Derivatives Association
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