FTX.US Derivatives wants to clear margined derivatives trades directly for consumers, and the CFTC will hold a 30-day period for receiving comments, according to a CFTC statement.
In a tweet thread on Thursday morning, FTX president Brett Harrison explained that FTX U.S. Derivatives’ current derivatives clearing organization (DCO) license requires full collateralization of derivative positions through an intermediary. FTX’s application seeks to amend this to allow for direct-to-consumer margin, both for retail and institutional customers.
According to Harrison, the change would allow derivatives risk on FTX to be “transparently assessed and mitigated in real time” because of FTX’s almost continuous setting of margin levels.
“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 acknowledged FTX.US Derivatives request and asked for public comments to be submitted on or before April 11.
Read more: FTX US Joins International Swaps and Derivatives Association