Part 41 - Security Futures Products

Section 4d(c) of the Commodity Exchange Act (“CEA”), 7 U.S.C. 6d(c), requires the CFTC to consult with the Securities and Exchange Commission (“SEC”) and issue such rules, regulations, or orders as are necessary to avoid duplicative or conflicting regulations applicable to firms that are fully registered with the SEC as brokers or dealers and the CFTC as futures commission merchants involving provisions of the CEA that pertain to the treatment of customer funds. The CFTC, jointly with the SEC, issued regulations requiring such dually-registered firms to make choices as to how its customers’ transactions in security futures products will be treated, either as securities transactions held in a securities account or as futures transactions held in a futures account. How an account is treated is important in the unlikely event of the insolvency of the firm. Only securities accounts receive insurance protection under provisions of the Securities Investor Protection Act. By contrast, only futures accounts are subject to the protections provided by the segregation requirements of the CEA.

The latest form for Part 41 - Security Futures Products expires 2023-12-31 and can be found here.