CME Group, the largest futures exchange in the world, will require brokers to report daily customer fund levels beginning on May 1. The action is a response to the $1.6 billion still missing in client money, as related to MF Global’s bankruptcy.
On April 2, CME sent out a notice to its members saying the daily reports must be signed by the brokers’ CEO, chief financial officer or their designated representative. Currently, the group only gets monthly reports on customer segregation.
“Customer segregation is the cornerstone of the futures industry, and it is critical to ensure the protections afforded under segregation are as strong as they can be for our market participants,” said CME in a notice.
CME Group said that it will conduct limited reviews on a “surprise basis” of customer segregation reports. CME was the designated self-regulator of MF Global, which included audit authority. It was also the regulator for OneCHicago, the electronic futures exchange that Royal Bank of Canada reported to. RBC was just charged with a multi-hundred million dollar wash scheme.