US CFTC’s New Rule on Vertically Integrated Models: Impact on Employers and Hedge Funds

Key Takeaways

  • 💡 US CFTC plans to publish a rule on vertically integrated models by summer
  • 📋 Rule will address conditions for entities within vertically integrated stack
  • 🌀 First time CFTC has allowed a vertically integrated market structure
  • 📅 Draft rule to be finalized within a year after comments and feedback
  • 📈 Integrated structures are becoming more common and require policy development
  • 📝 Rule will address conditions to wall off entities within integrated stack
  • 🔍 CFTC approved plan for vertically integrated market structure from Bitnomial
  • 🔄 Integrated structures have become a trend, prompting the need for policy
  • ⏰ Draft rule expected to be finalized within a year

Exploring Vertically Integrated Market Structures in the US

The US Commodity Futures Trading Commission (CFTC) has announced plans to introduce a new rule focusing on vertically integrated models within the market. This rule is set to be published by the summer and will define the conditions that entities operating within vertically integrated stacks must adhere to.

This marks the first time that the CFTC is permitting a vertically integrated market structure, reflecting the evolving landscape of the financial industry. With integrated structures becoming more prevalent, policy development in this area is seen as crucial to ensure fair practices and transparency.

Bitnomial, a market participant, has already received approval from the CFTC for its vertically integrated market structure, signaling a shift towards this type of operational model. The draft rule is currently in the works and is expected to be finalized within a year after receiving comments and feedback from industry stakeholders.

As the trend towards integrated structures gains momentum, the CFTC is taking proactive steps to regulate this market approach effectively, enhancing oversight and compliance within the industry. Stay tuned for further updates as the draft rule progresses towards implementation.

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