CFTC staff will not recommend action against clearing houses that use trust companies for daily settlement

The Commodity Futures Trading Commission’s Division of Clearing and Risk has issued a no-action letter that lets derivatives clearing organisations (DCOs) use trust companies to conduct daily settlements with clearing members. CFTC Letter No. 26-30 is dated 5 November 2026.

The letter responds to a request from Nodal Clear dated 29 October 2026, but the position covers any DCO. The Division “will not recommend that the Commission take enforcement action against any DCO for using a trust company to conduct daily settlements with clearing members, if the DCO treats the trust company as if it were a settlement bank for the purpose of compliance with Regulations 39.14(c) and (d).”

The gap in the rules

The CFTC’s customer-protection framework, in Section 4d of the Commodity Exchange Act and parts 1 and 22 of the Commission’s regulations, requires customer funds to be held with a “bank or trust company”. Regulation 39.14, which governs DCO settlement procedures, defines a settlement bank, in relevant part, as “a bank”. The letter notes that there are no references to trust companies in Regulation 39.14.

Nodal argued that the customer-protection benefits of using a trust company are equivalent to those of using a bank, and that a DCO can use its existing procedures and criteria for evaluating and monitoring settlement banks to evaluate and monitor a trust company. It also noted that Regulation 39.14 has not been substantively revised since it was adopted in 2011.

Digital-asset collateral

Nodal represented that state-regulated trust companies are among the leading custodians of digital assets, and said that clarifying their use for daily settlement would make it easier for DCOs to accept such assets as margin collateral. These are Nodal’s representations. The letter does not approve any digital asset, or any other asset, as margin collateral.

Staff position, not a Commission rule

The letter represents the views of the Division only and is not binding on the Commission. It concerns enforcement action only and is not a legal conclusion on how the Commodity Exchange Act or the Commission’s regulations apply. It does not excuse compliance with any other applicable requirement. Because it rests on Nodal’s representations, different or omitted material facts “may require a different conclusion or render this letter void”, and the Division can condition, modify, suspend or terminate the position.

Analysis. The relief widens the range of institutions a DCO can use for daily settlement without removing any settlement-bank compliance duty. Any DCO that announces it is using a trust company, or accepting new collateral types through one, will still need to show how it applies Regulation 39.14(c) and (d) to that institution.

Sources

• CFTC Letter No. 26-30, Commodity Futures Trading Commission, 5 Nov 2026.