In this response, the WFE recommends that the Commission engage industry further regarding certain aspects of the proposal, such as the time-to-maturity for foreign sovereign debt instruments, as well as certain aspects regarding ETF investment, such as:

  • The reconsideration of requirements that the FCM or DCO should be an AP of the ETF,
  • That the ETF is acceptable by the DCO as a performance bond from clearing members to margin customer trades,
  • That redemptions should be limited to cash, and,
  • That the ETF invests at least 95 percent of its assets in in securities comprising the U.S. Treasury securities index whose performance the fund seeks to replicate.

It is the WFE’s belief that, once adjusted, these amendments will continue to safeguard customer funds and enable investments to be converted to cash in a timely manner at a predictable value, while allowing FCMs and DCOs to attain capital efficiency and foster market resilience.