Market Access and Intermediation
DCMs and DCOs that list and clear event contracts are subject to certain swap data reporting and recordkeeping requirements (the “SDR Regulations”). 17 In particular, Parts 43 and 45 of the SDR Regulations require real-time reporting of swap transaction and pricing data, as well as broader swap data, to swap data repositories (“SDRs”). As we discuss further below, in late 2025 and early 2026, the CFTC’s DMO and its Division of Clearing and Risk (“DCR”) issued no-action relief letters to several event contract DCMs and their affiliated DCOs, providing relief from the SDR Regulations. Event contract DCMs and DCOs had routinely sought relief from the SDR Regulations on the basis that the SDR Regulations impose unviable operational and financial burdens. One DCM and DCO pair noted in its request letter that the costs of SDR reporting fees per trade are “approximately twenty times” the fees that the DCM charges per event contract trade. 18 Until recently, most DCOs offered clearing services through an intermediated model in which an FCM collects margin from a customer and posts it to a DCO. In such models, the FCM guarantees the customer’s financial obligations to the DCO and performs certain risk management tasks such as know-your-customer and anti-money laundering screenings. Under a non-intermediated model, participants post margin directly to a DCO and in these instances the DCO must decide whether to step into the role of performing such screening to ensure compliance with DCO requirements to maintain appropriate fitness standards and objective, risk-based admission and participation requirements. A DCO could also offer a hybrid model, where participants can either clear on a direct basis or clear through an FCM. On December 18, 2025, the CFTC staff published a request for comment regarding potential issues for DCOs that clear derivatives for retail participants on a direct (i.e., non-intermediated) basis. 19 Intermediation expands the scope of potential market participants, including to regulated entities such as mutual funds and exchange-traded funds. However, the CFTC originally required certain event contract DCMs to allow only trades not made through an FCM or IB (i.e., “non-intermediated trades”). This requirement reflected concerns regarding the adequacy of the intermediary’s surveillance systems, policies, processes and procedures, as opposed to relying on the DCM’s own systems, policies, processes and procedures. These non-intermediated trades to retail customers had to be fully-collateralized, as we discuss further below. However, over the past year, CFTC staff has removed prior conditions that prohibited DCM participants from clearing through third-party clearing members. Unlike securities exchanges, commodity and derivatives regulations do not prohibit retail participants from trading on a DCM or clearing directly with a DCO. A DCM’s rulebook and its designation order determine who may access its market, and a DCO’s rulebook and registration order set conditions on who can be a clearing participant. For DCMs and DCOs that seek to allow 17 The SDR Regulations are set out in CFTC Regulations 38.8(b), 38.10, 38.951 (in part), 39.20(b)(2), and Parts 43 and 45. 18 Letter from Margo Bailey, Sr. Counsel, LedgerX LLC d/b/a MIAX Derivatives Exchange, to Rahul Varma and Richard Haynes, Acting Dirs. of U.S. CFTC (July 1, 2025), available at https://www.cftc.gov/csl/25- 45/request_letter/0/download. 19 CFTC Staff Request for Comment on the Direct Clearing of Derivatives by Retail Participants (Dec. 18, 2025), available at https://www.cftc.gov/media/12861/DerivativesRetailInvestors_RFC121725/download.
March 2026 / Page 7
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