NFA proposes “Corzine rule”


The NFA is proposing limitations on what brokerage firms can do with client assets, a rule intended to avoid another MF Global disaster. The proposal, so-called the “Corzine rule,” would require the futures-firm chief to approve the transforms of customer funds.

CME Group Inc and IntercontinentalExchange both support the rule, according to the Wall Street Journal. A CME spokeswoman told the Journal that “more work needs to be done to ver the idea.”

“This won’t be the only response, but it’s another way we can safeguard customer funds,” said Daniel Roth, the NFA’s CEO and president.

Alternatives to the rule include proposals that would allow customers to store funds at clearinghouses instead of brokerage firms, or creating insurance funds to protect customer accounts. Under the Corzine rule, there is no mechanism to prevent customer-money moves, only the supervisory capacity.

Read more about the “Corzine rule”

Photo credit: eflon

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About the Author

Felix Shipkevich
Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

1 Comment on "NFA proposes “Corzine rule”"

  1. This is an interesting idea but it needs to be sorted out properly

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