MF Global Statement by NFA IB Representatives

NIBA Members,

We'd like to share a few thoughts about the MF Global situation. First, we believe that customers should get segregated funds due them immediately. The basis of our industry has been that funds held in a commodity account have a minimal risk of loss due to institutional or market-structure failures. It is extremely important that we instill confidence in our customers and lenders to hedge and speculate in our markets. Just returning from an NFA Board meeting, we are assured the entire industry is working to get customer funds released by the bankruptcy trustee as soon as possible. The NFA is scheduling visits/audits to all FCMs to confirm compliance with seg fund requirements. Remember, facts are limited and action in this matter is completely up to the court appointed trustee. Regulators are in search of information and facts for all involved in this situation. We would urge everyone to cooperate with the NFA staff by answering any question they may have of you, and in a timely fashion. The NFA staff is working hard to help everyone stay in compliance and ensure our markets continue to operate effectively during this difficult time.

Can we expect change in regulations because of this? With a problem of this magnitude, change is almost certain. Before we can speculate on what kind of changes will be made, it is important to find the cause of the problem. The futures industry has weathered many obstacles over the years and we will weather this one as well. We have a great industry but it will take all of us to help regain the confidence our markets deserve. Let's remain patient and trust that our leaders are working hard to get customer money released and order restored.

Gratefully submitted,