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CFTC 60-second rule will force rejections, say futures commission merchants

Hedge Funds Review – Futures commission merchants will have a minute to accept or reject trades for clearing under a CFTC rule. Buy-side firms need to be aware of limits they are given and be able to work within them.

As clearing for over-the-counter derivatives takes off, clients may find an increasing number of their trades rejected by the futures commission merchants (FCMs) that stand between them and a clearing house, dealers warn. This is the result of a Commodity Futures Trading Commission (CFTC) rule that means FCMs have a maximum of 60 seconds to accept or reject a trade for clearing, they claim.

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