CME Group and CME Trust just announced that it would guarantee up to $300 million to the MF Global trustee in order to speed up the process of returning client money.
MF Global’s client accounts have been frozen since last Monday, when the firm declared bankruptcy and it was discovered that there were funds missing from segregated customer accounts.
From the press release:
Though CME Clearing does not guarantee FCM-held assets, CME Group is willing to provide a $250 million financial guarantee to the Trustee to give the Trustee greater latitude to make an interim distribution of cash to customers now, given the monumental task he faces to sort through considerable data and claims in order to complete the MF Global liquidation and make distributions to creditors. Additionally, CME Trust will provide $50 million to CME Group market participants in the event there is a shortfall at the conclusion of the Trustee’s distribution process.
That’s quite a venture, especially because there were reports yesterday that the process to for client money to be returned was going to be prolonged.
Also – bear in mind that CME Group, which owns the Chicago Mercantile Exchange and the New York Mercantile Exchange, is also hurting from the clients’ inability to access their accounts because those clients are not able to trade. Trading volume on commodity exchanges have fallen in the wake of MF Global’s bankrupt.
More details to come as we get it.
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