WASHINGTON — Commodity Futures Trading Commission staff today issued a Request for Comment to better inform the staff’s understanding of the issues related to derivatives clearing organizations that provide direct clearing services to retail traders (Retail DCOs).  These clearing services may be provided either through a fully-collateralized clearing model that has direct access for retail participants (non-intermediated clearing), or a hybrid model that includes both fully-collateralized direct clearing to retail participants and intermediated clearing by futures commission merchants to retail customers. 

“Since 2022, I have repeatedly called for the CFTC to increase its focus on retail protection as our markets continue to evolve, with new technology providing direct access for retail traders that would have been unimaginable just a few years ago,” said Acting Chairman Caroline D. Pham. “For example, there has been an exponential increase in direct clearing for retail traders, where there are no brokers such as CFTC registered futures commission merchants that protect customer funds and protect against abusive sales and marketing practices. In 2023, I proposed a tailored registration framework for Retail DCOs that would address risks and potential retail binary options fraud. It is incumbent upon the Commission to consider how to update our regulations for market structure developments, because innovation thrives when there are clear rules and safeguards for all participants, from retail traders to the biggest market makers.” 

This staff request for comment seeks public input on possible measures that may be needed to mitigate risks to either the Retail DCO, or to retail participants, that are unique to these structures. These measures could include tailored requirements for Retail DCOs that provide these services, such as for retail protection, governance and risk management, conflicts of interest, market conduct and integrity, transparency or a new registration sub-category for Retail DCOs. 

Comments will be accepted until Jan. 19, 2026. Comments may be submitted electronically through the CFTC Comments online process.