17 C.F.R. § 1.29
Gains and losses resulting from investment of customer funds
(a) The investment of customer funds in instruments described in § 1.25 shall not prevent the futures commission merchant or derivatives clearing organization so investing such funds from receiving and retaining as its own any incremental income or interest income resulting therefrom.
(b) The futures commission merchant or derivatives clearing organization, as applicable, shall bear sole responsibility for any losses resulting from the investment of customer funds in instruments described in § 1.25. No investment losses shall be borne or otherwise allocated to the customers of the futures commission merchant and, if customer funds are invested by a derivatives clearing organization in its discretion, to the futures commission merchant.
Notes of Decisions
Cited in 13
cases, 1984–2013 · leading case: Randy BIBBO, Plaintiff-Appellant, v. DEAN WITTER REYNOLDS, INC., Defendant-Appellee, 151 F.3d 559 (6th Cir. 1998).
Randy BIBBO, Plaintiff-Appellant, v. DEAN WITTER REYNOLDS, INC., Defendant-Appellee, 151 F.3d 559 (6th Cir. 1998). “On appeal, we must determine whether a federal regulation, 17 C.F.R. § 1.29 (1986) (“Regulation 1.29”), which permits a Futures Commodities Merchant (“FCM”) such as Dean Witter to retain interest earned on customers’ margin funds, pre-empts an Ohio statutory provision, O.”
In re Sentinel Mgmt. Grp., Inc., 728 F.3d 660 (7th Cir. 2013). “23 (stating that § 6d(a)(2) does not prohibit an entity from withdrawing segregated funds “to the extent of its actual interest”); 17 C.F.R. § 1.29 (an FCM may receive and retain “as its own any increment or interest resulting” from investments).”
Fed. Sec. L. Rep. P 90,286 Raizy Levitin v. Painewebber, Inc., 159 F.3d 698 (2d Cir. 1998). “17 C.F.R. § 1.29 (expressly permitting merchants subject to CFTC regulation to retain interest on customer funds posted as collateral).”
Dominic Marchese v. Shearson Hayden Stone, Inc., 734 F.2d 414 (9th Cir. 1984). “17 C.F.R. § 1.29 provides in part that the permissible investments “shall not prevent the futures commission merchant .”
Dominic Marchese v. Shearson Hayden Stone, Inc., (Two Cases), 822 F.2d 876 (9th Cir. 1987). “17 C.F.R. § 1.29 (1986). 3 This regulation was first issued in 1937, and Congress has reviewed, amended, and reauthorized the Act several times since then without commenting on the issue of margin interest.”
Griswold v. EF Hutton & Co., Inc., 622 F. Supp. 1397 (N.D. Ill. 1985). “Under CFTC rules ( 17 C.F.R. § 1.29 ) any interest obtained on investment of customers’ funds while on deposit may be kept by a broker.”
Crabtree Investments, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 577 F. Supp. 1466 (M.D. La. 1984). “17 C.F.R. § 1.29 . As noted earlier, a margin is a deposit in a customer’s account to protect the broker from losses caused by the daily fluctuations in the account.”
Marchese v. Shearson Hayden Stone, Inc., 644 F. Supp. 1381 (C.D. Cal. 1986). “It provides that “[t]he investment of customer funds in obligations described in section 1.”
Craig v. Refco, Inc., 624 F. Supp. 944 (N.D. Ill. 1985). “17 C.F.R. § 1.29 (1985). It is this regulation which plaintiff claims flatly contradicts, and is, therefore, an erroneous application of § 4d(2)’s mandate that brokers will handle margins “as belonging to [the] customer.”
In re Sentinel Mgmt. Grp., Inc., 689 F.3d 855 (7th Cir. 2012). “23 (stating that § 6d(a)(2) does not prohibit entities withdrawing segregated funds “to the extent of its actual interest”); 17 C.F.R. § 1.29 (FCMs may receive and retain funds “as its own any increment or *867 interest resulting” from investments).”
Craig v. Refco, Inc., 816 F.2d 347 (7th Cir. 1987). “29, 17 C.F.R. § 1.29 (1985), permits the broker to keep the interest earned.”
Frederick Grede v. Bank of New York (7th Cir. 2012). “10-3787, 10-3990 & 11-1123 funds “to the extent of its actual interest”); 17 C.F.R. § 1.29 (FCMs may receive and retain funds “as its own any increment or interest resulting” from investments).”
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