CFTC Letter 26-30 lets a trust company settle a clearinghouse

Commodity Futures Trading Commission Letter No. 26-30, issued on November 5, 2026, records that Division of Clearing and Risk staff will withhold an enforcement recommendation where any derivatives clearing organization uses a trust company for daily settlement and treats it as a settlement bank under Regulations 39.14(c) and (d). The position answers Nodal Clear’s October 29, 2026 request and leaves the bank definition in Regulation 39.14(a)(2) in force.

Regulation 39.14 has required that settlement machinery since May 7, 2012. Staff will not recommend enforcement on the facts stated in the letter, and the duties in paragraphs (c) and (d) stay on the clearing organization.

Key facts

• Letter No. 26-30 is a Division of Clearing and Risk position dated November 5, 2026, signed by Richard Haynes, Acting Director, and announced in Release Number 9322-26.
• Nodal Clear, LLC requested it on October 29, 2026 through Ken McCracken, general counsel, under Commission Regulation 140.99.
• Any derivatives clearing organization is covered if it treats the trust company as a settlement bank for Regulations 39.14(c) and (d).
• Regulation 39.14(a)(2) still defines a settlement bank as a bank keeping an account used for a settlement in paragraph (a)(1).
• Section 4d of the Commodity Exchange Act, 7 U.S.C. § 6d, and Regulation 1.20 allow customer funds at a bank or a trust company.
• Regulation 39.14(b) requires a settlement with each clearing member at least once each business day. Compliance was required from May 7, 2012.
• The Commission’s table for penalties assessed after January 15, 2025 sets an administrative maximum of $1,136,100 per non-manipulation violation by a registered entity under 7 U.S.C. § 13a, for violations on or after November 2, 2015.

Methodology and sources

Primary documents run from the November 8, 2011 derivatives-clearing final rule through the November 5, 2026 staff letter. The core texts are CFTC Letter No. 26-30, the October 29, 2026 request from Nodal Clear, Release Number 9322-26, and Regulation 39.14 in the 2011 core-principles final rule. Customer-fund context comes from Section 4d, Regulation 1.20, part 22 and the January 5, 2017 MF Global release. Comparison texts are Regulation (EU) No 648/2012, Delegated Regulation (EU) No 153/2013, the assimilated United Kingdom text and the Bank of England’s supervision account. Applicant statements stay attributed to Nodal Clear. The letter is an enforcement position on stated facts, unlike the order that registered a collateralised-futures clearing house or the staff letter that prices introducing-broker software relief in passivity.

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What Regulation 39.14 requires of the firm that moves the cash

Core Principle E, Section 5b(c)(2)(E) of the Commodity Exchange Act, 7 U.S.C. § 7a-1(c)(2)(E), is the settlement-procedures principle behind Regulation 39.14. Paragraph (c) requires arrangements that eliminate or strictly limit settlement-bank credit and liquidity risk, with documented criteria, monitoring, and a review of failure at the bank holding the largest share. Paragraph (d) requires contracts making transfers irrevocable and unconditional no later than the debit or credit, and paragraph (e) requires a record of the flow of funds.

A settlement bank under Commodity Futures Trading Commission Regulation 39.14(a)(2) is a bank that maintains an account either for a derivatives clearing organization or for any of its clearing members, where the account is used for a settlement in Regulation 39.14(a)(1). Those settlements are variation margin on futures, options and swaps, option premiums, deposits and withdrawals of initial margin, payments due on the final settlement date, and other cash flows to or from each clearing member, including swap coupons. Regulation 39.14(b) requires a settlement with each clearing member at least once each business day, and the capacity to settle during the day when the clearing organization’s thresholds are breached or markets are extremely volatile. The compliance date was May 7, 2012, under the final rule at 76 Federal Register 69334, published November 8, 2011. Letter 26-30, dated November 5, 2026, leaves that bank definition in place and states a staff position for a trust company treated as a settlement bank under paragraphs (c) and (d).

Section 4d and parts 1 and 22 require customer funds at a bank or trust company. Regulation 1.20 implements Section 4d(a), and part 22 implements Section 4d(f). Nodal Clear quotes Regulation 1.20(g)(2) and Regulation 1.49(d)(2)(i) for that depository permission. Under Regulation 140.99 the firm asked for bank treatment on paragraphs (c) and (d), with the rest of Regulation 39.14 still observed. Staff will not recommend enforcement against any derivatives clearing organization that uses a trust company for daily settlement if the firm is treated as a settlement bank for Regulations 39.14(c) and (d).

How the United States, the European Union and the United Kingdom place clearing cash

Sources, last updated November 9, 2026: 17 C.F.R. § 39.14, 76 Federal Register 69334, CFTC Letter No. 26-30, the CFTC penalty table as of January 15, 2025, Regulation (EU) No 648/2012, assimilated Article 50, assimilated Article 47, delegated Article 45, assimilated Article 20 and Bank of England supervision pages.

The Bank of England supervises UK central counterparties under the assimilated cash articles. Nodal Clear’s request says New York’s Department of Financial Services scrutinises banks and trust companies under Article 3, section 94 and following, across more than 1,300 institutions with assets totalling more than $3.3 trillion. The staff letter records that description as the applicant’s.

Daily settlement under Regulation 39.14 is the movement of margin and other cash between a derivatives clearing organization and its clearing members through an account the rule calls a settlement-bank account. Holding customer funds is a different legal job. Section 4d of the Commodity Exchange Act, 7 U.S.C. § 6d, and Regulation 1.20 allow futures customer funds at a bank or a trust company, and Nodal Clear’s October 29, 2026 request quotes Regulation 1.20(g)(2) for that permission, including a Federal Reserve Bank where the Council has designated the clearing organization as systemically important. Regulation 39.14(a)(2) still describes the firm that moves the daily cash as a bank. Letter 26-30 tells any derivatives clearing organization that staff will withhold an enforcement recommendation where a trust company handles that movement and is treated as a settlement bank for paragraphs (c) and (d). Article 50(1) of Regulation (EU) No 648/2012 instead points a central counterparty towards central bank money where practical and available.

Regulation HH, 12 C.F.R. § 234.3(a)(9), is a Federal Reserve rule for a financial market utility the Council has designated under Title VIII, and it calls for central bank money where practical and available. Nodal Clear’s Subpart C election is a Commission status, distinct from that designation. A capped agency order, rather than a division letter, is the form in the Securities and Exchange Commission’s capped exemption from Treasury repo clearing.

"Based on the facts presented and the representations Nodal has made, 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)."

— Richard Haynes, Acting Director, Division of Clearing and Risk, Commodity Futures Trading Commission (CFTC Letter No. 26-30)

What the October 2011 customer-fund orders still show

On January 5, 2017, Judge Victor Marrero of the Southern District of New York entered consent orders against Jon S. Corzine, former chief executive of MF Global Inc., and Edith O’Brien, former assistant treasurer. Release Number 7508-17 states that the Corzine order requires a $5 million civil monetary penalty for his role in the unlawful use of customer funds totalling nearly one billion dollars, plus an undertaking to stay unregistered and out of futures-commission-merchant roles. The O’Brien order imposes a $500,000 penalty for aiding and abetting. Both orders find that, in the last week of October 2011, MF Global used nearly one billion dollars of customer segregated funds. Earlier orders required restitution sufficient to pay customer claims. The amended complaint was filed on December 6, 2013 in Civil Action No. 11-cv-7866.

Those orders address segregation at a futures commission merchant, a different charge from a Regulation 39.14 breach by a clearing organization, which is why paragraphs (c) and (d) still govern a trust company that moves daily margin.

"This resolution demonstrates the importance that the Commission attaches to customer protection, which has long been a hallmark of our mission."

— Aitan Goelman, then Enforcement Director, Commodity Futures Trading Commission (CFTC Release Number 7508-17)

What the letter means for clearing houses, members and counsel

A derivatives clearing organization that relies on Letter 26-30 applies the paragraph (c) criteria, monitoring and concentration review to the trust company, and it puts paragraph (d) finality language in the contract, with a record under paragraph (e). Regulation 39.15 still governs how clearing-member and customer funds are held.

Nodal Clear’s request describes the firm as clearing house for Nodal Exchange, LLC and Coinbase Derivatives, both designated contract markets, owned through Nodal Exchange by European Energy Exchange AG, with a Subpart C election. The request says the firm is preparing to accept stablecoins as initial margin and, once Public Law 119-27 is effective, only stablecoins that comply with that statute. A footnote says the firm will meet other Commodity Exchange Act and Commission requirements when accepting USDC as initial margin. The staff letter stops short of naming an approved trust company.

A futures commission merchant meets the letter only where its clearing organization adds the trust company to the daily call, while Section 4d segregation stays in part 1. The conflicts proposal on exchange-owned futures commission merchants is a separate affiliations docket. Counsel compares the request with the response, because Nodal Clear asked for bank treatment plus full compliance with Regulation 39.14, and the letter specifies settlement-bank treatment for paragraphs (c) and (d). Concentration at the institution with the largest share is the pattern in the report on four settlement banks left to square an instant-payment leg.

"Clarifying that DCOs may use trust companies to conduct daily settlements with clearing members will facilitate the ability of DCOs to accept digital assets as margin collateral by allowing them to seamlessly integrate digital assets into their existing daily workflows for collateral movement."

— Ken McCracken, General Counsel, Nodal Clear, LLC (request of October 29, 2026)

What stays open after Letter 26-30

The Division may condition, modify, suspend, terminate or otherwise restrict the letter. Amending Regulation 39.14(a)(2) so the definition names a trust company would take a Commission rulemaking. Until that amendment, a clearing organization relies on the staff position, the October 29 representations, and its own work under paragraphs (c) and (d).

The request cites Staff Letter 25-40 of December 8, 2025 and Staff Letter 26-16 of May 29, 2026. Letter 26-30 leaves both outside its text. The staff action deeming certain single-stock perpetual futures approved is a listing question. The April 14, 2023 joint statement covers recognition of certain incoming United States central counterparties. The Bank of England’s revised outsourcing statement for central counterparties takes effect on March 18, 2027.

TL;DR

CFTC Letter No. 26-30, dated November 5, 2026, is a Division of Clearing and Risk enforcement position sought by Nodal Clear on October 29, 2026. Staff will withhold an enforcement recommendation against any derivatives clearing organization that uses a trust company for daily settlement, if the clearing organization treats the trust company as a settlement bank for Regulations 39.14(c) and (d). Those paragraphs still require selection criteria, monitoring, a concentration test and finality contracts. Regulation 39.14(a)(2) still defines a settlement bank as a bank. The Commission’s penalty table, for assessments after January 15, 2025, sets an administrative maximum of $1,136,100 per non-manipulation violation by a registered entity for conduct on or after November 2, 2015. European Union and United Kingdom central counterparties remain under their own cash rules.

Frequently asked questions

What does CFTC Letter 26-30 actually decide?

Letter 26-30 is a staff enforcement position, sought by Nodal Clear on October 29, 2026 and signed by Richard Haynes on November 5, 2026. Staff will withhold an enforcement recommendation against any derivatives clearing organization that uses a trust company for daily settlement, if the clearing organization treats the trust company as a settlement bank for Regulations 39.14(c) and (d). Release Number 9322-26 is that day’s summary. The letter records the Division’s views, and a Commission rule amending Regulation 39.14 is a separate legal act that this letter leaves unstarted.

Which rule still defines a settlement bank as a bank?

Regulation 39.14(a)(2) defines a settlement bank as a bank maintaining an account for the derivatives clearing organization or a clearing member, used for variation margin, premiums, initial margin, final settlement or other clearing-member cash flows. Compliance was required from May 7, 2012. Nodal Clear’s request states that the rule has stood without a substantive revision since the 2011 adoption, and the staff letter records that note. Letter 26-30 leaves the definition in the Code of Federal Regulations and supplies an enforcement position for a trust company that is scored and contracted as a settlement bank.

Who may rely on the letter, and when can staff revisit it?

Any derivatives clearing organization may rely on the operative sentence, which is wider than Nodal Clear alone. The position rests on the representations in the October 29 request, so different, changed or omitted material facts can lead staff to another conclusion or render the letter void. The Division keeps authority to condition the letter further, modify it, suspend it, terminate it or otherwise restrict it. A clearing organization that relies on the letter still keeps the criteria, monitoring records and contracts that paragraphs (c) and (d) require.

What do Regulations 39.14(c) and (d) still require if a trust company is used?

Paragraph (c) still requires documented criteria on capitalization, creditworthiness, access to liquidity, operational reliability, and regulation or supervision, plus ongoing monitoring and a review of concentration, including failure of the institution with the largest share of settlement activity. Where a response is reasonably necessary, the clearing organization adds accounts, approves further institutions, sets concentration limits or takes another appropriate step. Paragraph (d) still requires contracts making transfers irrevocable and unconditional no later than the debit or credit, stating when transfers occur, and supporting a routine check that the transfers match the contract.

Does the letter move where customer funds may be held?

Section 4d and Regulation 1.20 already allow futures customer funds at a bank or a trust company, which is the depository point Nodal Clear quoted from Regulation 1.20(g)(2). Letter 26-30 grants a settlement role under Regulation 39.14, conditioned on settlement-bank treatment for paragraphs (c) and (d), and it leaves futures commission merchant segregation duties in part 1. The January 5, 2017 consent order against Jon S. Corzine, a $5 million civil monetary penalty for customer-fund failures at MF Global, is the Commission’s own illustration of why those segregation duties exist.

How do the European Union and United Kingdom cash rules differ?

Article 50(1) of Regulation (EU) No 648/2012 tells a central counterparty to settle in central bank money where practical and available. Article 47(4) and Article 45 of Delegated Regulation (EU) No 153/2013 then put other cash with an authorised credit institution that the central counterparty assesses as low credit risk, and they call for collateral on at least 95 percent of overnight commercial cash. The United Kingdom assimilated those articles, and the Bank of England supervises UK central counterparties. Letter 26-30 addresses a United States clearing organization’s daily settlement and leaves those European texts on their own statute books.

This article is informational analysis only and does not constitute legal, regulatory, tax, or investment advice. Regulatory frameworks change frequently and interpretation depends on facts and circumstances; primary documents and official regulator guidance always supersede summaries. Firms should consult qualified legal counsel and their relevant supervisory authority before taking any action based on the analysis above.