CFTC staff allows clearing organizations to use trust companies for daily settlement.

The CFTC’s Division of Clearing and Risk issued a no-action letter clarifying that derivatives clearing organizations may use trust companies to conduct daily settlements with clearing members, provided the trust company is treated as a settlement bank under applicable CFTC requirements. The guidance resolves ambiguity over whether trust companies qualify for the daily settlement role, which is typically filled by banks. It matters because it expands the pool of eligible settlement institutions for DCOs and could ease settlement arrangements for clearing members. Watch for how DCOs update their settlement bank lists and whether trust companies take on formal settlement roles.