CME Group and National Futures Association (NFA), in conjunction with the InterContinental Exchange (ICE), the Kansas City Board of Trade (KCBOT) and the Minneapolis Grain Exchange (MGEX), have formed a joint committee to review how self-regulatory organisations can strengthen current safeguards for customer segregated funds held at the firm level in light of the MF Global bankruptcy.
This coordinated effort by all of the futures industry self-regulatory organisations (SROs) will examine what changes can be made to rules or to the ways firms demonstrate compliance with those rules to prevent customer losses due to the insolvency of a futures commission merchant (FCM).
"Self-regulation has served the futures industry and its customers very well for a very long time," says Daniel Roth (pictured), president of NFA. "However, the MF Global bankruptcy has dealt a severe blow to the public’s confidence in the financial integrity of our futures markets and it is incumbent upon the industry’s SROs – in collaboration with the Commodity Futures Trading Commission – to take the necessary steps to enhance customer protection, particularly in the area of segregated funds."
The committee will hold its first meeting within the next two weeks and plans to issue a series of recommendations by the end of the first quarter of this year.
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