CHICAGO, Nov. 11, 2011 /PRNewswire/ -- CME Group, the
world's leading and most diverse derivatives marketplace, today
took extraordinary measures in order to accelerate the return of
substantial customer cash and other assets securely held at CME
Clearing, other clearing houses and MF Global custodians following
the failure of MF Global. Though CME Clearing does not
guarantee FCM-held assets, CME Group is willing to provide a
$250 million financial guarantee to
the Trustee to give the Trustee greater latitude to make an interim
distribution of cash to customers now, given the monumental task he
faces to sort through considerable data and claims in order to
complete the MF Global liquidation and make distributions to
creditors. Additionally, CME Trust will provide $50 million to CME Group market participants in
the event there is a shortfall at the conclusion of the Trustee's
distribution process.
Until this point, the Trustee has authorized the distribution of
$1.45 billion in customer collateral,
which permitted the transfer of open positions and avoided greater
losses to customers that would have been incurred through
liquidation. Cash balances remain frozen. Today's
proposal is designed to ensure that customers would have access to
a greater percentage of the total customer-segregated funds MF
Global accounted for at CME Clearing, other clearing houses and MF
Global custodians.
This unprecedented guarantee offered by CME Group would be used
by the Trustee in the event that a final accounting determines that
the Trustee distributed more property than was permitted by the
Bankruptcy Code and CFTC regulations. In addition, if there
is a shortfall at the conclusion of the distribution and the
$50 million Trust has not been
exhausted, the remainder of those funds will be used to restore the
other CME Group customer accounts that suffered a shortfall in
customer-segregated funds held at MF Global. The Trust was
designed to be used in cases such as this if customers lose money
due to the failure of a clearing member.
"The failure of MF Global and the firm's mishandling of customer
segregated funds is absolutely uncharted territory for this
industry, and this extreme measure will help to provide all former
MF Global customers access to their account balances that had
previously been frozen in the liquidation," said CME Group
Executive Chairman Terry Duffy.
"Throughout this process, we have been working with the Trustee to
help him release securely-held customer property at CME Clearing to
customers and transferee clearing members. We have and will
continue to advocate on behalf of customers - wherever they cleared
or traded."
"CME Group believes it is critical to pursue this option with
the Trustee to distribute additional securely-held customer
assets," said CME Group CEO Craig
Donohue. "Our primary concerns are the protection
of our customers at CME Clearing and the integrity of all
futures markets. We recognize that the U.S. Bankruptcy Code
requires the Trustee to account for all customer assets and
claims to ensure a fair, pro-rata distribution of those assets, and
we sincerely appreciate how complex this task is for the Trustee.
We believe this extraordinary measure is necessary to ensure
that all customers are treated fairly during the unique and
challenging circumstances surrounding the failure of MF Global.
We continue to work with the Trustee to return all of the
remaining segregated funds to customers as soon as possible as
allowed by law."
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