Alternatives to the LSOC model explained

Author: | Published: 6 Mar 2012

Implementation of the legally separated but operationally comingled (LSOC) model for protection of customer collateral is far from a sure thing in the futures market. LSOC would not address the MF Global problem, and some industry participants say the present futures model would offer greater protection through an online reporting regime. 
"[The CFTC] would have access to the segregated condition of every futures commission merchant (FCM) in the United States," said John Mattesich, president of ETD Consultants and a former chief auditor at the Commodity Futures Trading Commission (CFTC). "Why bother with all of the other regulations [being considered] that don’t give the same protection?"   
Mattesich sees technological infrastructure along with a...