FARM BUSINESS NEWS
Industry Scrutinizes Proposed CFTC Rule
Katie Micik DTN Markets Editor
Tue May 21, 2013 03:24 PM CDT

OMAHA (DTN) -- Two provisions of CFTC's proposed rules to enhance customer protections came under fire in a House Agriculture Committee hearing on the regulator's reauthorization on Tuesday.

Futures industry leaders said the proposals on residual interest and capital charges would substantially increase the cost of hedging, perhaps requiring customers to put up to $100 billion more in collateral, and would disproportionately affect small to mid-size futures commission merchants. They urged CFTC to complete a thorough cost-benefit analysis before implementing the rule.

The residual interest provision requires futures commission merchants (FCMs) to maintain enough capital to cover any deficiency in ...

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