CHICAGO, Nov. 2, 2011 /PRNewswire/ -- CME Clearing is
holding substantial excess margin collateral from MF Global Inc.
("MF Global") and therefore continues to be in a strong financial
position, both with respect to MF Global and more generally.
MF Global's customer positions on CME Group exchanges were and
continue to be substantially over-collateralized at CME Clearing.
As of today, the proprietary positions of MF Global have been
liquidated with no adverse market impact, leaving a substantial
part of that collateral to be applied to MF Global's obligations at
CME.
Our primary focus is the protection of our customers and the
integrity of our markets. Our current efforts are focused on
working diligently with the CFTC and the SIPC trustee to facilitate
the transfer of customer positions to other qualified clearing
member firms, with as much CME Clearing held collateral as will be
legally permitted. CME has no control over the disposition of
customer segregated funds that are held by MF Global and not held
by CME Clearing. Those funds are now under the control of the
SIPC trustee. Nevertheless, we have urged the SIPC trustee to
facilitate the transfer of such funds from MF Global to MF Global
customers.
With respect to the apparent shortfall in customer segregated
funds held by MF Global (and which were not on deposit with CME
Clearing), it appears that any transfer of such funds occurred
following the completion of CME audit procedures respecting such
funds and in violation of CFTC Regulations and CME rules. CME
completed its on-site review last week. At that time, the
results of our review indicated that MF Global was in compliance
with its segregation requirements. It now appears that the
firm made subsequent transfers of customer segregated funds in a
manner that may have been designed to avoid detection insofar as MF
Global did not disclose or report such transfers to the CFTC or CME
until early morning on Monday, October 31,
2011. CME fully discharged its auditing procedures in
accordance with applicable procedures and standards and is working
with regulators and authorities to investigate these transfers.
CME conducts regulatory financial examinations in accordance
with the Joint Audit Committee procedures and standards.
http://www.wjammer.com/jac/ The focus of these
examinations is to effectively monitor the firm's financial records
to determine the firm's full segregation compliance and to monitor
any necessary corrective action. CFTC regulations and CME
rules require maintenance of excess segregated funds at all times.
Clearing firms are not permitted to transfer funds from the
segregated account which will result in an under-segregated
condition. CFTC Regulations and CME Rules also require
clearing firms to calculate their customer segregated position
daily and notify both the CFTC and CME whenever it knows or should
have known that the customer segregated position was
under-segregated. None of MF Global's reports reflected any
under-segregated positions. The reports actually reflected
excess segregated funds.
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, energy, agricultural commodities, metals, weather
and real estate. CME Group brings buyers and sellers
together through its CME Globex® electronic trading platform and
its trading facilities in New York
and Chicago. CME Group also operates CME Clearing, one of the
world's leading central counterparty clearing providers, which
offers clearing and settlement services for exchange-traded
contracts, as well as for over-the-counter derivatives transactions
through CME ClearPort®. These products and services ensure that
businesses everywhere can substantially mitigate counterparty
credit risk in both listed and over-the-counter derivatives
markets.
CME Group is a trademark of CME Group Inc. The Globe Logo, CME,
Globex and Chicago Mercantile Exchange are trademarks of Chicago
Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the
Board of Trade of the City of
Chicago, Inc. NYMEX, New York Mercantile Exchange and
ClearPort are registered trademarks of New York Mercantile
Exchange, Inc. COMEX is a trademark of Commodity Exchange,
Inc. All other trademarks are the property of their
respective owners. Further information about CME Group (NASDAQ:
CME) and its products can be found at www.cmegroup.com.
CME-G
SOURCE CME Group