Controls on futures and over-the-counter (OTC) customer funds
will be stricter following allegations of MF
Global’s (MFG) use of customer funds in the days
before its collapse.
The question is how heavy-handed this and other post-MFG
reforms will be, and how long before foreign and the US
securities markets adopt similar requirements.
Pending the outcome of investigations into the failure of
the futures broker and its segregation shortfall, the brokerage
industry is mooting how collateral segregation and its
record-keeping practices will change.
Irrespective of the cause of MFG’s shortfall,
now estimated at $1.2 billion according to the Financial Times,
the Commodity Futures Trading Commission’s (CFTC)
proposed swaps clearing rules under Dodd-Frank will tighten
fund and collateral segregation.
"The CFTC’s approach to clearing must take into