CME Group Chief Operating Officer Bryan Durkin said on Monday the exchange will not guarantee the funds that remain missing from customer accounts at bankrupt brokerage MF Global after they are reimbursed by the bankruptcy trustee.
Such a move would be "unwise" and the CME has a "fiduciary responsibility" to its shareholders, he said at a National Grain and Feed Association conference on Monday.
CME in late November expanded the size of a fund to help return cash to former MF Global clients to $550 million from $250 million. The brokerage collapsed Oct. 31 after making bad bets on European debt.
Hundreds of millions of dollars were missing from clients' accounts at the firm.
A trustee overseeing the bankruptcy has said an increased payout to former clients should restore at least two thirds of U.S.-based property for the broker-dealer unit.
CME will not guarantee the remainder, Durkin said.
"We really feel we cannot expose ourselves to that level of responsibility or risk," Durkin told the NGFA Country Elevator Conference. "It's not covered as part of our rules. All of that being said we have taken some very unprecedented steps......read on
Terrence Duffy of the CME Group in November 2011
"No customer has ever lost a penny as a result of clearing house default at CME group, and that includes during the Great Depression"
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