CME Group Update

Posted: Feb 2, 2012

CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers

Today the CME Group announced that it will establish a $100 million fund to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets. 

The said that they understand that many have been hurt by MF Global’ s bankruptcy-including many farmers and ranchers who were impacted in their ability to buy seed to plant for next year's crop or feed and raise the livestock that sustain our country. In light of the MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country's food producers who are using our markets to hedge their crops and livestock that feed the world. Under the terms of the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the future insolvency of a clearing member or other market participant. Farming and ranching cooperatives also will be eligible for up to $100,000 per cooperative. If losses in a future failure total more than $100 million, participants will be eligible for a pro-rata share of the fund, up to $100 million. This new fund is expected to be back by an insurance policy and will not be available retroactively. 

For more information visit http://cmegroup.mediaroom.com/index.php?s=43&item=3237&utm_medium=Email&utm_source=ExactTarget&utm_campaign=CME+Group+-+Letterhead 

Today's announcement is the first step in what will be a series of enhancements that our industry will undertake to strengthen customer protections. According to the CME Group they fully understand the need for a holistic solution to restore confidence in the market place, and will continue to actively work with the industry to develop recommendations. 

For updates visit http://www.cmegroup.com/clearing/mfglobal.html