How Futures Commission Merchants Work: Clearing, Capital Rules, and an Industry of 75 Firms

A futures commission merchant (FCM) is a firm registered with the US Commodity Futures Trading Commission (CFTC) to accept customers’ money and collateral for futures and options on futures, hold their accounts, and stand behind their trades with the clearing house. Every US futures position held by a customer sits in an account at an FCM, and as of September 30, 2026 there were 75 of them, with the five largest holding just over half of all customer futures funds.

In short: the FCM is the credit layer between customers and the clearing house. The clearing house collects margin from its clearing members, not from end customers. An FCM that is a clearing member collects margin from its customers, pays the clearing house every day whether or not its customers have paid it, and absorbs any customer loss that exceeds the customer’s money. CFTC Regulation 1.17 sets how much capital it must hold for that risk, mainly 8% of the margin its customers’ positions require. The industry has consolidated sharply: CFTC data show 171 firms filing as FCMs in December 2006 and 75 in September 2026, while customer funds more than tripled.

The basics of exchanges and clearing are in how futures exchanges work. How the money inside an FCM is protected, including segregation, the residual interest rule, and the MF Global and Peregrine failures, is covered in how futures customer funds are protected. This article covers what FCMs do, how they are capitalized, and how the industry is structured.

A common misconception: “my broker is my clearing firm”

Often it is not. The firm whose app or platform you use may be one of several kinds of registrant, and the chain from your order to the clearing house can have two or three links.

Role	What it does	Can it hold customer money?
Introducing broker (IB)	Solicits and accepts orders, passes them to an FCM	No. The FCM holds the account
Guaranteed IB	An IB whose obligations an FCM guarantees by agreement	No. Exempt from the IB capital minimum because the FCM backs it
Non-clearing FCM	Holds customer accounts and money, but clears through another FCM in an omnibus account	Yes
Clearing FCM	Holds customer accounts and is a clearing member of one or more clearing houses	Yes
Clearing member, not an FCM	Clears only its own (house) trades, for example a proprietary trading firm	No customer business

The CFTC’s capital rule reflects this ladder. Under CFTC Regulation 1.17(a)(1)(iii), an independent IB must hold adjusted net capital of at least $45,000 (or more if its self-regulatory organization or, for broker-dealers, the SEC requires it). A guaranteed IB has no separate minimum. An FCM’s minimum, described below, starts at $1,000,000 and in practice is set by the size of its customers’ positions.

What an FCM actually does

It carries the account

The FCM opens and maintains the account, delivers the risk disclosures, runs know-your-customer and anti-money-laundering checks, and reports positions for large trader reporting. It also holds the customer’s money in segregated accounts, a duty with three separate pools in the CFTC’s monthly data:

Section 4d(a)(2) segregation for futures on US exchanges.
Part 30 secured amount (held in “Section 30.7 accounts”) for futures on non-US exchanges.
Cleared swaps segregation under Section 4d(f), which uses a different model (legally segregated, operationally commingled) from futures.

It guarantees the trades

Clearing houses face their clearing members, not end customers. When a customer’s position loses money, the clearing house debits the clearing FCM in the next settlement cycle. CME Group’s quarterly report for the period ended September 30, 2026 says its clearing house transferred an average of about $8.2 billion a day in the first nine months of 2026 from clearing firms whose positions lost value to those whose positions gained. The FCM pays its share on time even if a customer has not yet paid the FCM. If the customer never pays, the loss is the FCM’s.

That guarantee is why FCMs set their own margin above exchange minimums when they choose, can liquidate positions without waiting for a customer to respond, and charge for credit in various ways. How margin and margin calls work at the account level is covered in how futures margin works.

It runs a balance sheet

FCMs earn commissions and clearing fees, and they earn interest on customer balances that they invest within the limits of CFTC Regulation 1.25 (which restricts investments of customer funds to a short list of instruments, such as US government securities). Bank-affiliated FCMs also use their clearing relationships to sell financing, execution, and other services. The economics reward scale, which is one reason the industry has concentrated.

The capital rule: CFTC Regulation 1.17

Regulation 1.17 requires each FCM to maintain adjusted net capital (roughly: liquid assets minus liabilities, minus haircuts on positions and charges for risky items) equal to or above the greatest of:

$1,000,000, or $20,000,000 if the FCM is also a registered swap dealer;
8% of the total risk margin requirement for customer and noncustomer positions, where “risk margin” means the maintenance margin required by the exchanges or clearing houses; swap dealer FCMs add 2% of uncleared swap margin;
the amount required by its registered futures association (the National Futures Association, whose Financial Requirements Section 1 mirrors these terms); or
for firms that are also SEC-registered broker-dealers, the net capital required by SEC Rule 15c3-1.

Clearing houses add their own floor. CME Rule 970 requires its clearing members to comply with CFTC Regulations 1.10, 1.12, 1.17 and 1.18 and to hold at least $5 million of capital, or, for a bank clearing member, at least $5 billion of Tier 1 capital.

The haircuts that make “adjusted” net capital smaller

Some of Regulation 1.17’s deductions show what regulators worry about:

Proprietary futures positions are charged the clearing house’s margin requirement when the FCM clears them itself, 150% of maintenance margin when it is a non-clearing member of a self-regulatory organization, and 200% otherwise.
Undermargined customer accounts are charged the amount needed to bring them back to maintenance margin, once a margin call has been outstanding for more than one business day.
Unsecured receivables, such as a customer’s deficit after a loss, are not allowable assets, so they reduce net capital dollar for dollar.

The early-warning system

CFTC Regulation 1.12 requires notice to the CFTC and the FCM’s designated self-regulatory organization (DSRO) when adjusted net capital falls below the greatest of:

150% of the $1,000,000 (or $20,000,000) dollar minimum;
110% of the 8% risk-based requirement; or
150% of the amount required by the NFA (110% under some margin-based computations).

Regulation 1.12 also requires notice within two business days of any event that reduces net capital by 20% or more, notice two business days in advance of withdrawals, advances or loans that would reduce excess net capital by 30% or more, and immediate notice of any shortfall in segregated funds.

Worked example: one customer, one gap, one FCM

Take a hypothetical mid-sized clearing FCM. All figures are illustrative.

Customer positions require $3.0 billion of maintenance margin at the exchanges; noncustomer (affiliate) positions require $0.25 billion.
Risk-based requirement: 8% x $3.25 billion = $260 million. That exceeds the $1 million floor, so it is the binding minimum.
Early-warning level: 110% x $260 million = $286 million.
Actual adjusted net capital: $340 million. The cushion above early warning is $54 million.

Scenario A: one large trader, one gap. A customer is long 1,000 E-mini S&P 500 futures. Each contract is $50 times the index, so at an illustrative index level of 6,000 the position’s notional value is 1,000 x $50 x 6,000 = $300 million. The account holds $25 million of equity. Overnight, the index gaps down 10%.

Loss: 1,000 x $50 x 600 = $30 million, owed to the clearing house in the morning settlement.
The customer’s $25 million covers part; the $5 million deficit is now a receivable from the customer.
The FCM must deposit $5 million of its own money into the customer segregated account (Regulation 1.22 forbids using other customers’ funds to cover it), and the receivable is a non-allowable asset.
Adjusted net capital falls to $335 million, a 1.5% drop. Still well above early warning.

Scenario B: one concentrated institutional customer. A fund holds $2 billion of notional equity index futures with $150 million of equity in the account. A move of about 10.2% against it produces a deficit of $2 billion x 10.2% - $150 million = $54 million, the FCM’s entire cushion. Adjusted net capital drops to the $286 million early-warning level, and the FCM must notify the CFTC and its DSRO. A slightly larger move, or a second such customer, would trigger the 20% decline notice ($68 million on $340 million).

The lesson professionals take from this arithmetic is that an FCM’s risk sits in concentrations, not averages. The 8% rule sizes capital to aggregate margin; a single customer whose position is large relative to its own equity can consume the margin of safety in one move. FCMs therefore set house margin above exchange minimums for concentrated accounts, impose position limits on clients, and stress test accounts against moves larger than the exchange’s.

What the CFTC’s FCM data shows

Each month the CFTC publishes a financial data report for every FCM and retail foreign exchange dealer. The figures below are from the report as of September 30, 2026, the latest available on November 10, 2026, and were aggregated in Python.

The size of the industry

76 firms appear in the report: 75 registered as FCMs (34 also broker-dealers, 5 also broker-dealers and swap dealers, 3 also retail forex dealers) and one retail forex dealer only.
54 of the 75 held customer funds for US futures (a positive Section 4d(a)(2) segregation requirement). The rest clear only for themselves, serve affiliates, or are in other lines of business.
Required customer funds: $366.7 billion in futures segregation, $71.0 billion in the Part 30 secured amount, and $199.2 billion in cleared swaps segregation.
FCMs held $382.2 billion in futures segregated accounts against the $366.7 billion required, so $15.4 billion of their own money sat in segregation as a buffer (the residual interest).
Aggregate adjusted net capital was $188.4 billion against a combined requirement of $51.0 billion, about 3.7 times. The aggregate hides wide variation between firms.

The largest FCMs by customer futures funds

FCM	Registration	Required futures segregation (Sept 30, 2026)
J.P. Morgan Securities LLC	FCM, broker-dealer, swap dealer	$59.8bn
Goldman Sachs & Co. LLC	FCM, broker-dealer, swap dealer	$43.8bn
Morgan Stanley & Co. LLC	FCM, broker-dealer, swap dealer	$35.4bn
BofA Securities Inc.	FCM, broker-dealer	$33.9bn
SG Americas Securities LLC	FCM, broker-dealer	$26.4bn
Citigroup Global Markets Inc.	FCM, broker-dealer, swap dealer	$21.7bn
Barclays Capital Inc.	FCM, broker-dealer	$21.5bn
StoneX Financial Inc.	FCM, broker-dealer	$14.2bn
Marex Capital Markets Inc.	FCM, broker-dealer	$11.2bn
BNP Paribas Securities Corp.	FCM, broker-dealer	$10.5bn

Bank-affiliated firms dominate the top of the list. The largest non-bank FCMs (StoneX, Marex, ADM Investor Services at $7.9 billion) serve commercial hedgers and institutional clients. Retail-focused FCMs are far smaller by this measure: Interactive Brokers held $10.3 billion; Charles Schwab Futures and Forex $0.8 billion; TradeStation Securities $0.7 billion; NinjaTrader Clearing $0.5 billion.

Concentration over time

Using the CFTC’s archived monthly reports for December 2006 and December 2012 alongside September 2026:

Report	Firms filing as FCMs	FCMs holding customer futures funds	Required futures segregation	Top 5 share	Top 10 share
December 31, 2006	171	90	$106.1bn	46.9%	71.6%
December 31, 2012	108	69	$145.9bn	52.5%	76.7%
September 30, 2026	75	54	$366.7bn	54.3%	75.9%

Two caveats. The 2006 list includes forex dealers that were then registered as FCMs, before the separate retail foreign exchange dealer category existed, so the fall in true futures FCMs is smaller than 171 to 75 suggests. And the top-five share of futures segregation understates concentration in clearing overall: across all three customer pools (futures, Part 30 and cleared swaps), the top five FCMs held 58.5% and the top ten 83.0% of required customer funds in September 2026.

Even so, the direction is clear. Customer money has more than tripled while the number of firms holding it has fallen by about 40% since 2006. Several forces have pushed the same way: the CFTC raised the FCM capital minimum from $250,000 to $1,000,000 and the IB minimum from $30,000 to $45,000 in a final rule published December 31, 2009; the post-MF Global customer protection rules of 2013 added residual interest and reporting obligations; and the long periods of near-zero policy rates (December 2008 to December 2015, and March 2020 to March 2022) shrank the interest income FCMs earn on customer balances.

Why concentration matters

Porting capacity. When an FCM fails, clearing houses try to move (“port”) its customers’ positions and collateral to healthy FCMs. With fewer FCMs, there are fewer firms with the capital, operations and appetite to take on a large book quickly.
Bank decisions spill over. Bank-affiliated FCMs allocate balance sheet across many businesses. When bank capital rules or a bank’s strategy change, client clearing capacity can change with them.
Customer choice narrows. Hedgers in smaller markets may find only a handful of FCMs willing to clear their products.

How professionals manage FCM risk

Large futures users treat their FCM as a credit exposure, not a utility:

Use more than one FCM. Asset managers and hedge funds commonly execute through several brokers and “give up” trades to one or more clearing FCMs under standard industry give-up agreements, so they can move positions if one FCM becomes a concern.
Read the public data. The CFTC’s monthly FCM report shows each firm’s adjusted net capital, requirement, and excess segregated funds. Each FCM must also publish a firm-specific disclosure document under CFTC Regulation 1.55 that covers its business, its DSRO, its material risks and its policies for investing customer funds.
Watch the residual interest target. FCMs set a target amount of their own money to keep in segregation. The CFTC report shows it. A firm that keeps a thin buffer, or frequently dips below its target, is taking more operational risk.
Negotiate margin and liquidation terms. Institutional agreements specify house margin, notice periods, and what the FCM may liquidate in a default, which matters most in fast markets.
Know the bankruptcy rules. In a US FCM insolvency, futures customers share customer property pro rata, and a shortfall is shared too (the fellow-customer risk explained in the customer funds article). Cleared swaps customers have more individual protection under the legally segregated model.

Canada in one paragraph

The structure is similar but the labels differ. Firms that carry futures accounts for Canadian clients are investment dealers that are members of the Canadian Investment Regulatory Organization (CIRO), subject to its capital and segregation rules, with provincial regulators overseeing them under laws such as Ontario’s Commodity Futures Act. Montreal Exchange contracts clear through the Canadian Derivatives Clearing Corporation (CDCC), whose clearing members play the role a clearing FCM plays at CME. The regulatory map is in how futures markets are regulated.

What can go wrong

A customer default larger than the FCM’s cushion. As the worked example shows, one concentrated account can consume an FCM’s excess capital in a single move.
Misuse of customer funds. MF Global (2011) and Peregrine Financial Group (2012) are the two modern US cases where customer money was missing when the FCM failed.
Liquidity, not solvency. An FCM can be solvent and still struggle to fund same-day settlement payments to the clearing house during a volatile session, especially if customers pay late.
Operational failure. CME’s clearing house marks futures positions to market twice each business day, according to its 2026 quarterly filing; a technology or banking outage at the FCM can turn into a missed payment.
Clearing house losses passed back. If another clearing member defaults and exhausts its own resources, surviving clearing FCMs can lose their guaranty fund contributions and face assessments, as described in how clearing houses work.

The short version

An FCM holds customer futures accounts and money and, if it is a clearing member, guarantees its customers’ trades to the clearing house, paying daily settlement whether or not customers have paid. CFTC Regulation 1.17 requires adjusted net capital of at least the greater of $1 million and 8% of the margin its customers’ and affiliates’ positions require, with early-warning notices at 110% of that level and after a 20% drop in capital. The worked example shows why concentrated customers, not averages, drive FCM risk. CFTC data as of September 30, 2026 show 75 FCMs, 54 of them holding $366.7 billion of required customer futures funds, with the top five holding 54.3%; in December 2006, 171 firms filed as FCMs. Choosing an FCM is a credit decision, and the public CFTC data are the place to start.