CME to Offer Swaps Users Cash Protection That Beats CFTC Rule
This article is for subscribers only.
CME Group Inc. plans to allow swaps traders to keep collateral with a third party, offering stronger protections than U.S. regulators required after MF Global Holdings Ltd. failed to safeguard $1.6 billion in customer cash.
CME Group, the futures exchange that’s expanding into clearing interest-rate and credit-default swaps, will give customers the option of holding their money at a neutral bank, said Kim Taylor, president of the Chicago-based company’s clearinghouse. The unaccounted-for customer funds at MF Global were within the brokerage’s control, not secured at either a clearinghouse or a third-party bank.