CFTC to Consider Post-MF Global Futures-Collateral Safeguards
February 23, 2012, 2:36 PM ESTBy Silla Brush
Feb. 23 (Bloomberg) -- The U.S. Commodity Futures Trading Commission will hold a roundtable next week to consider steps to safeguard collateral -- including a plan to insulate futures clients’ funds during a broker default -- following the collapse of MF Global Holdings Ltd., according to two people briefed on the agenda.
The plan, one of several possible regulatory changes, would mimic new rules completed Jan. 11 for the swaps market, according to the people, who spoke on condition of anonymity because the roundtable agenda isn’t public. The swap plan, approved on a 4-1 vote, is designed to protect clients’ collateral if their broker defaults, while also allowing the customer funds to be pooled before a bankruptcy.
The roundtable will take place on Feb. 29 and March 1, according to one of the people. The event is an early step toward additional rules and regulations that would require an official CFTC proposal and vote by the agency’s five commissioners.
CFTC Chairman Gary Gensler asked the agency’s staff to develop recommendations for new oversight of the industry’s self-regulatory organizations and brokers. The review may include recommendations for changes requiring congressional action, according to a Jan. 26 letter from Jill E. Sommers, a Republican commissioner, to Senator Pat Roberts, a Kansas Republican. Sommers is overseeing the agency’s work on the collapse of MF Global.
--Editors: Maura Reynolds, Gregory Mott
To contact the reporter on this story: Silla Brush in Washington at sbrush@bloomberg.net
To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net
