The NFA released the following statement on January 18:
Futures industry self-regulatory organizations form joint committee to address customer segregation issues
CME Group and National Futures Association (NFA) today announced, in conjunction with the InterContinental Exchange (ICE), the Kansas City Board of Trade (KCBOT) and the Minneapolis Grain Exchange (MGEX), the formation of a joint committee to review how self-regulatory organizations 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 organizations (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,” said Daniel Roth, 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.