CHICAGO, Nov. 22, 2011 /PRNewswire/ -- To accelerate the
return of additional securely held funds to MF Global Inc.
customers, CME Group today announced it has increased its financial
guarantee to the SIPC Trustee from $250
million to $550 million.
CME Group's proposal to the Trustee is designed to increase the
payout percentage from 60 percent to 75 percent in early
December. This distribution would include customers holding
cash balances and warehouse receipts, as well as customers who
received non-sufficient funds checks from MF Global. As a
result of this proposal, roughly $4
billion of the $5.5 billion
that was supposed to be held by MF Global in segregation will be
returned to customers. With this offer, the entire
$2.5 billion securely held at CME
Clearing will have been distributed.
While the final accounting of customer segregated assets and
claims will occur in the bankruptcy process, CME Group is confident
that recent reports of significantly larger customer segregated
shortfalls are incorrect. CME Group continues to work with
the Trustee and the CFTC to finalize this accounting.
Though CME Clearing does not guarantee FCM-held assets, the
increase in the amount of CME Group's previously announced
financial guarantee gives the Trustee even greater latitude to make
larger interim distributions 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. CME Group's previous $250 million guarantee to the Trustee facilitated
the Bankruptcy Court's approval to distribute an additional
$520 million to cash-only account
holders of MF Global announced last week, as well as the 60 percent
distributions to all customers recently announced by the Trustee.
CME Trust also has pledged an additional $50 million to CME Group market participants in
the event there is a shortfall at the conclusion of the Trustee's
distribution process.
"From day one, we have worked hard to protect the interests of
all MF Global customers, and we continue to make very significant
progress," said CME Group Executive Chairman Terry Duffy. "In four weeks, CME Group has
been the only exchange and clearing house to offer a financial
guarantee to help return funds to all customers. We
transferred 15,000 accounts and $1.45
billion in collateral through the bulk transfer process, we
previously offered a $250 million
guarantee that facilitated approval of additional distributions,
and now we are increasing our guarantee to $550 million to accelerate the return of
substantial cash to MF Global customers. We're pleased
to be able to assist customers in recovering up to 75 percent of
their segregated assets at this time, and we will continue to seek
the recovery of additional customer funds."
"The protection of our customers and the integrity of all
futures markets continue to be our two chief concerns, and today we
are taking aggressive action to further assist customers and
restore confidence to the marketplace," said CME Group Chief
Executive Officer Craig
Donohue. "Our efforts over the last four weeks have
provided greatly needed relief to all futures industry customers of
MF Global, and are helping to return nearly $4 billion to customers. While
customer-segregated funds at CME Clearing were protected at all
times, this case illustrates that MF Global failed to adequately
protect customer funds. Moving forward, CME Group will be a
leading voice in developing industry-wide solutions to enhance
confidence in protections for FCM-held customer collateral."
The total 75 percent distribution to customers will include any
funds already received in the bulk transfer process November 3 and 4, when 15,000 accounts were
transferred with roughly $1.45
billion in collateral, and the distribution of $520 million in cash-only account balances
approved by the Court on November 17
and expected to be completed next week.
CME Group is using a number of channels to communicate with
customers as soon as information is available and will continue to
provide updates throughout the process through its clearing members
and on its website for this matter,
www.cmegroup.com/mfglobal.
The information in this statement does not apply to any other
MF Global entity, including separate insolvency proceedings
involving the parent company, MF Global Holdings Ltd. or non-US
affiliates of MF Global.
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