CME Group wants customer money held at clearing houses

July 26th, 2012, 05:37 AM

exactly, thats why I think a central futures pool may be the way to go as I too use ICE(E) for my brent trades and then there's eurex etc and I dont fancy having funds split across different clearing houses as that just wouldn't work for me.

I think something needs to be done though.

Maybe a funds insurance policy (guaranteed) might be worth considering but for the exact funds amount (here in the UK we have a compensation scheme but it is only up to �50K [savings get �85K] and if you have more in your broker, still leaves a shortfall)?

thanks all for your replies so far :-)

July 26th, 2012, 06:12 AM

although if the funds were split across clearing houses but at your broker it is all aggregated as a single lump, that might work...

just need to ensure the clearing house(s) don't go belly up ;-)

July 31st, 2012, 10:21 PM

I always thought customer funds for futures were segregated? And they are right?
But how can the broker just take chunks of customers money out and gamble with it?
Is this not the fault of the bank where the money is held? Why do they allow this?
Its ok if the Bank itself invests the money like even money in a savings account they can, but they will never lose it.
How is the broker itself allowed to remove money from customer accounts without the proper records for trading and clearing purposes?
The banks need to be held liable for this I believe as they are regulated to supervise said segregated accounts and they are not doing it.

August 3rd, 2012, 12:33 PM

Hi 1nfinity - apologies for delayed response, still enjoying a summer break :-)

indeed, it completely amazed me what these brokers did and how they had managed to do it under the '?watchful eye?' of the banks and regulators...

Being a customer of MF Global UK at the time they went under, I have since learned that re-hypothecation seemed to be a major part in allowing the broker to prop-up their own bets with customer monies (even segregated I believe) which eventually lead to their going into chap 11/administration.

To be honest, I wouldn't have even known to look in the small print for re-hypothecation as probably naivety on my part, I thought segregated meant segregated (plus I had never heard the term re-hypothecation either..!).

Cheers
Bry

CME Group wants customer money held at clearing houses

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CME Group wants customer money held at clearing houses