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”