An 11-Year History of CFTC FCM Data

UPDATE: I am adding a zip file that contains the CFTC FCM Data reports, sorted by Customer Seg Funds. CFTC FCM Data Nov 11 years

A few weeks ago, just by chance, I took a look at a few of the old CFTC FCM Data reports that are archived on CFTC’s website. At the time I noted that there were many fewer FCMs reporting Customer Segregated Funds in 2012 than there were in previous years, at least at the reports I looked at on a spot-check basis. I decided at that time that over the holiday season I’d take a closer look at the numbers, in a more organized way that just randomly spot-checking them. Frankly, based on a very preliminary spot-check, I expected to see a long, steady decline in the number of FCMs clearing customer business.

Earlier this week (January 14th) a comment on the John Lothian Newsletter prompted me to think more about this.

“**JK – Key stat in this story: The number of FCMs registered with the CFTC has fallen 33 percent since 2008.”

Then the CFTC published the November, 2012 FCM Data report and I figured the time was ripe for a new blog post.

So, I took the November month-end data for each report over the last 11 years and assembled the the information below. Some interesting things I found:

– while there may be a reduction of 33% in the number of FCMs registered at CFTC, the number of them clearing customer business has remained the same for the past 3 years (November-over-November).

– the number of FCMs clearing customer business was actually higher in November 2012 than it was in November 2009.

– longer term, the number of FCMs clearing customer business is down more than 30%, even while the amount of Customer Segregated Funds has nearly tripled.

– the highest level of Customer Seg Funds was reported in November 2008, after which the amount dropped roughly 17%, but the amount of Cust Seg reported since then has been steadily rising, despite the market-shuddering MF Global and Peregrine events.

– fewer FCMs overall, and especially fewer FCMs clearing customer business, mean less choice for customers, and probably mean less innovation for clearinghouses and few opportunities for vendors (and consultants).

I’d argue that these results, which I admits surprised me, provide evidence of a stronger U.S. futures market than some claim. Certainly, volumes are down today from recent historic highs. But the amount of money being stored in Segregated accounts is not as anemic as I had expected to see. And the number of FCMs clearing customer business has remained steady over the past three years, though definitely at lower than historic levels. For well-heeled futures traders, this seems like a positive trend. For smaller retail futures traders and small hedgers, fewer FCMs on the customer side is an ill wind. But overall, I’d think that, despite MF Global the Wasendorf scandal, these numbers are indicative of a relatively healthy U.S. futures market.

When you look at these numbers, what seems compelling to you?

I am using just November data for the past 11 years. (That’s what exists on the website as of this writing.) I might delve into November-over-November numbers further in the future, but as a starting point I’m just using November month-end data as reported to CFTC.

2012 November:
Number of FCMs reporting Customer Seg Funds: 70
Total Amount of Customer Seg Funds: $157,547,596,681

2011 November:
Number of FCMs reporting Customer Seg Funds: 70
Total Amount of Customer Seg Funds: $149,071,676,345

2010 November:
Number of FCMs reporting Customer Seg Funds: 70
Total Amount of Customer Seg Funds: $148,865,958,243

2009 November:
Number of FCMs reporting Customer Seg Funds: 65
Total Amount of Customer Seg Funds: $139,182,038,261

2008 November:
Number of FCMs reporting Customer Seg Funds: 74
Total Amount of Customer Seg Funds: $166,558,495,345

2007 November:
Number of FCMs reporting Customer Seg Funds: 86
Total Amount of Customer Seg Funds: $128,465,965,699

2006 November:
Number of FCMs reporting Customer Seg Funds: 93
Total Amount of Customer Seg Funds: $110,095,575,975

2005 November:
Number of FCMs reporting Customer Seg Funds: 94
Total Amount of Customer Seg Funds: $95,497,405,299

2004 November:
Number of FCMs reporting Customer Seg Funds: 97
Total Amount of Customer Seg Funds: $83,117,537,566

2003 November:
Number of FCMs reporting Customer Seg Funds: 102
Total Amount of Customer Seg Funds: $67,149,211,221

2002 November:
Number of FCMs reporting Customer Seg Funds: 102
Total Amount of Customer Seg Funds: $55,016,148,023

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