Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich May 30, 2012
corzine

In an effort to reassure investors whose confidence in the safety of their funds was shaken by the MF Global scandal, the NFA has proposed a new rule that would require Futures Commission Merchants (FCMs) to obtain approval from a senior executive before withdrawals can be made from customer accounts.

The proposed rule, NFA Financial Requirements Section 16, introduces several new requirements that FCMs must comply with:

-Must have written policies and procedures governing the maintenance of the FCM’s residual interest in customer segregated funds.

-Must specify a dollar or percent amount that the FCM seeks to maintain as its residual interest in customer segregated funds.

-May not withdraw more than 25% of the FCM’s residual interest in customer segregated funds without written approval from CEO, CFO or other designated principal.

-If withdrawal is made, must file a written notice with the NFA including:

-Notification of the disbursement;

-Reason, amount and recipient(s);

-Confirmation of preapproval by a qualified individual;

-Current estimate of remaining total residual interest;

-Representation that the FCM remains in compliance with

segregation requirements.

Shortly before MF Global went bankrupt, approximately $1.6 billion of customer money disappeared, apparently transferred to MF Global’s own accounts to pay its own debts. Much of that amount has yet to be accounted for. Jon Corzine, MF Global’s former CEO, has testified that he did not approve the withdrawals. He has not been accused of wrongdoing.

“These new requirements will help begin the process of restoring public confidence in the financial integrity of customer segregated funds,” NFA President and CEO Dan Roth said in a statement.

Read more about the proposed rule.

Photo credit: Matt Stoller