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CME Group | Conference Session Overview

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For CME Group, nothing is more important than the confidence customers have in our marketplace and the protection of our customers when using our markets.

Earlier this year, CME Group launched the CME Group Family Farmer and Rancher Protection Fund, which is currently accepting applications from farmers, ranchers and cooperatives who traded in CME Group markets and suffered losses from the failure of PFG.  As an IB, you can help your clients sign up for the program and find additional information at www.cmegroup.com/clearing/family-farmer-fund.html

Since the failure of MF Global and Peregrine Financial Group (PFG), CME Group, in conjunction with the NFA, CFTC and others in our industry, have put in place and are in the process of implementing a number of new requirements designed to deter another firm from misusing customer funds. Enhancements that are already in place include:

  • Daily segregated funds reports now required from all FCMs.
  • Bimonthly SIDR reports now required from all FCMs to indicate where and how customer funds are invested.
  • More frequent spot-checks being completed for FCMs.
  • Using confirmation.com for direct, electronic submission of 3rd party bank statements concerning segregated funds in connection with CME and NFA audits.

In the near future, the following additional requirements will be implemented:

  • Effective next month, CEOs and CFOs will be required to sign-off on disbursements over 25% of the firm’s excess segregated funds (if not for the benefit of customers), plus provide notice of those disbursements to the DSRO.
  • As announced last week, all FCMs will be required to provide their DSROs direct, online, read-only access to account balance information from the banks holding segregated funds.  Implementation for these rules will be finalized following CFTC approval. 

CME Group Executive Chairman and President Terry Duffy testified on this matter in late July and early August, and his comments on potential industry solutions are available online. Ann Shuman, CME Group Managing Director & Deputy General Counsel will be part of the Legal Update panel at the NIBA event on September 12 in Chicago and will be happy to take questions at that time.

 

The Opinions expressed are the opinions of the author. The opinions, the trading styles, trading information and trading programs are not endorsed by the NIBA, but are the individual opinions, styles, information and programs of the author.

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