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