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For Immediate Release
May 29, 2012
National Futures Association proposes new financial requirements for FCM treatment of customer segregated funds
May 29, Chicago - National Futures Association (NFA), the self-regulatory organization for the U.S. futures industry, has proposed new financial requirements that will strengthen regulations regarding the treatment and monitoring of customer segregated funds held by futures commission merchants (FCMs). The proposed new requirements were approved by NFA's Board of Directors on May 17.
NFA has submitted the proposed financial requirements and accompanying interpretive notice to the CFTC for approval.
NFA Financial Requirements Section 16, and an Interpretive Notice entitled "NFA Financial Requirements Section 16: FCM Financial Practices and Excess Segregated Funds/Secured Amount Disbursements" implement the recommendations made by the SRO Committee and NFA's Special Committee on the Protection of Customer Funds, which were formed in early 2012 in light of the MF Global bankruptcy. The SRO Committee is comprised of senior representatives from NFA, CME Group, the InterContinental Exchange, Minneapolis Grain Exchange and the Kansas City Board of Trade. The Special Committee is comprised of NFA's ten public directors.
"In the process of developing these new requirements, we received comments and suggestions from a variety of industry sources," said NFA President Dan Roth, "including the Futures Industry Association, the CFTC and NFA's Board of Directors, as well as our FCM, CPO/CTA and IB Advisory Committees.
The major provisions of the new requirements are as follows:
All of these new requirements also apply to foreign futures and options customer secured amount funds accounts.
"These new requirements will help begin the process of restoring public confidence in the financial integrity of customer segregated funds," said Roth. "Making this information available to the public will give investors a better picture of the financial standing of the FCM with which they are conducting business."
The complete text of the Rule Submission Letter is available on NFA's website.
NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.