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MF Global Updates

December 16, 2011

1 min read

AML and Ethics Training Certifications

Announcement Re: AML and Ethics Training Certifications NIBA members who formerly cleared MFG and took AML and Ethics Training from the Walsh Agency, can receive a copy of their certification documents free of charge. Receiving FCMs are required to confirm that APs have completed AML and Ethics Training. Those confirmation records are not readily accessible from MFG. If you took your trading from the Walsh Agency, the Agency will send you a copy of the declaration and certification for no charge. Email WalshAMLEthics@gmail.com, an NIBA Member Benefits Provider, and they will send you the documents within 72 hours free.

CME Group Letter on Terry Duffy's Senate Agriculture Committee Testimony

To Our CME Group Trading Community, Tuesday December 13th, Terry delivered testimony as part of the Senate Committee on Agriculture, Nutrition and Forestry's hearing on the failure of MF Global. We continue to share with the Congress that MF Global has put market users in a tragic position, as transfers of customer funds made by MF Global for the benefit of that firm are very serious violations of the Commodity Exchange Act, CFTC regulations and CME Group rules. These violations - not inadequate regulation - caused tremendous harm to our customers and our markets. We also continue to advocate for the return of customer funds - as much as possible as soon as possible. We are pleased to report that the MF Global Trustee's third distribution of customer funds (72 percent of total U.S. segregated customer property) is in process. After receiving funds from the Trustee early this week, we...

NIBA MF Global Updates and Activities

Dear NIBA Members - Welcome to the MF Global Update on the NIBA website. The purpose of the Update is to provide accurate, current information about all aspects of the MF Global failure and bankruptcy which directly affect our members. Here are a few actions the NIBA has already taken in your behalf: Filed our “Release the Seg Funds” Petition in the bankruptcy court. The Petition included approximately 700 signatures collected online in about 48 hours. Our Petition continues to be one of the items by which the court was most impressed. Engaged representation to file our Petition in person and to attend every substantial court hearing and bankruptcy trustee meeting in New York City. Met, and continue to meet, with NFA regarding its responses and filing requirements as a result of MFG’s failure. Ongoing communications and responses. Met, and continue to meet, with CME Group regarding transfers of customers...

Judge Approves 72% "True Up" Distribution to MF Global Customers

On Friday 12/9/11, Judge Glenn approved a large, third bulk distribution to MF Global customers that will get all customers to the point where they will each have gotten back roughly 72% of the value of their assets in domestic futures accounts. Included in the 72% calculation will be US and foreign currency that was held in domestic accounts, T-Bills, warehouse receipts and physical commodities. Futures contracts will be valued as of their transfer or liquidation price, so that any gains or losses after 10/31/11 will be reflected in the calculation. What will not be included are any amounts held for trading foreign futures – recovery of those amounts will take more time and distributions will come later. This distribution will begin immediately and most of the money will be distributed in a matter of days, although some amounts will involve more complex calculation and may take as long as...

CME Group Customer Letter on Duffy Testimony

To Our CME Group Trading Community, Yesterday, Terry delivered testimony as part of the House Committee on Agriculture's examination of the MF Global bankruptcy. As you are a valued member of the CME Group trading community, we want to provide additional context around the statement that Terry delivered. The full testimony can be accessed online. As you know first-hand, MF Global has put market users in a tragic position. The impact of MF Global's misconduct is significant for farmers, ranchers, grain cooperatives, miners and other commodity consumers, producers and end-users who use commodity price hedging as an integral part of their businesses. We can assure you that CME Group's efforts, with respect to the unprecedented loss of customer segregated funds caused by MF Global, have been, and will continue to be, to assist customers and minimize market disruptions. As Terry said in his testimony, on Monday, October 31, CME Group...

CME Group Member Letter on 3rd Trustee Distribution

December 9, 2011 To Our CME Group Trading Community, Today the Bankruptcy Court approved the MF Global Trustee's motion to make a third interim distribution of MF Global customer funds. This distribution, which is expected to begin next week, enables the Trustee to distribute 72 percent of customer funds previously frozen, including trapped account balances, dishonored checks, and distributions with respect to warehouse receipts and other customer property at MF Global. While the bankruptcy process does not move as fast as any of us would like, it is important to note that this process stands in stark contrast to the situation of MF Global customers outside the U.S., where many foreign receivers have not paid out any cash since the bankruptcy. Since this process began, CME Group is the only exchange to have offered any guarantee to accelerate the Trustee's distributions, and we are gratified that our $550 million guarantee...

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...

Futures Industry Guarantees - Who Guarantees What to Whom?

Dear All, The MF Global debacle has brought to light a misunderstanding of the structure and guarantees within our industry. We are finding larger members of our community who choose to violate a code of ethics that we have observed for generations. Our industry has prided itself on the fact that no customer has lost funds held in a customer segregated account due to the financial failure of an FCM. This has been due to the cooperation of the futures exchanges, clearing houses, and the clearing members of the exchange clearing houses. It has not been due to any clearing house guarantees. In the past, when clearing firms have failed, everyone worked together to protect the customer. As our industry consolidates, (exchanges, clearing houses, FCMs and the clearing member community), the financial risks of every individual failure have grown exponentially. The Role of Exchanges vs. Clearing Houses Exchanges provide a...

What Can You Do in the Midst of the MF Global Meltdown

Many of our NIBA members have been hard hit by the MF Global debacle. Understandably, emotions are raw, frustration is high and there is widespread financial hardship. While clearly there are no instant solutions to this mess, we write to let you know what NIBA has been doing on your behalf, and what you can do. The road ahead is a potentially long, but at this juncture the immediate need is the release by the bankruptcy trustee of additional segregated funds owned by clients to not only maintain existing trading positions, but necessary for trading at all. Although the CME has added some $300 million funds, the release of all customer assets is vital to an efficient marketplace. In addition, there is the important issue of when and how, our broker membership might recover the commission revenue rightfully earned. It seems these two huge issues are out of your control...

Chairman's Message - MF Global | November 2011

Dear Members - The past three weeks have been the most frustrating, the most confusing, the most disappointing weeks I’ve spent in the 35 years I’ve been in the futures industry. Many NIBA members are suffering financial hardships due to MF Global’s failure and bankruptcy, and the process for recovery appears to be lengthy. The NIBA has received hundreds of phone and email messages both from members who are directly affected, and from those who are not. Here’s what we’ve done so far in your behalf: Submitted a Petition which included 700 signatures collected online in about 72 hours directly to the Bankruptcy Court calling for the immediate distribution of segregated funds. Attended Court and Trustee meetings in New York by representation of our Association legal advisors. Organized numerous meetings and communications with other industry professionals including the NFA, CFTC, FIA, CME and ICE. Voiced the Association’s opinions in interviews...

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