The Futures Industry Association has established a task force to address issues related to the bankruptcy of MF Global, the FIA said Tuesday.
The so-called Futures Market Financial Integrity Task Force will develop specific recommendations that can be implemented in the near term through both industry best practice and regulatory change. In particular, the task force will consider such areas as: enhanced financial recordkeeping and reporting requirements; greater transparency regarding the investment of customer funds; internal control standards for the customer funds segregation process; and, the adequacy of customer funds protections.
The task force is to be headed by a steering committee comprised of a diverse group of futures commission merchants. Its initial recommendations are expected to be presented no later than the FIA International Futures Industry Conference in Boca Raton, Fl. on March 13-15.
The FIA says that it expects that the task force’s recommendations will be considered and implemented in conjunction with other initiatives announced in response to the collapse of MF Global as well as the ‘lessons learned’ enquiry being conducted by the Commodity Futures Trading Commission.
“The FIA looks forward to partnering with end-users, regulators, legislators and clearinghouses to restore customer confidence in the futures markets,” said Michael Dawley, chairman of the FIA and managing director, Goldman Sachs & Co. “Although we still do not know for certain what caused the significant shortfall in customer segregated funds required to be held at MF Global, any loss of customer assets is entirely unacceptable and the reasons for the deficiency need to be identified.”
“The FIA is committed to producing practical and meaningful recommendations that regulators and FCMs can implement to further protect users of the listed derivatives markets,” Dawley added. “While some of these recommendations may require regulatory change, the FIA believes that many improvements can and should be implemented by the industry as soon as practicable.”
The steering committee is to include representatives from: Bank of America Merrill Lynch, Barclays Capital, Citigroup Global Markets, CME Group, Credit Suisse Securities, Deutsche Bank, Getco, Goldman Sachs, HSBC, IntercontinentalExchange, J.P. Morgan Securities, Morgan Stanley, Newedge and R.J. O’Brien & Associates.