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CME Temporarily Reduces Margin to Ease MF Global Account Shift

CME Temporarily Reduces Margin
CME Group's Chicago Board of Trade. Photographer: Tim Boyle/Bloomberg

Nov. 5 (Bloomberg) -- CME Group Inc. is reducing the initial margin required to back futures trades to ease the bulk transfer of accounts held by MF Global Holdings Inc. customers.

“This is a short-term accommodation to maintain market integrity and provide temporary relief to customers whose accounts have been disrupted by this event,” the Chicago-based exchange owner said in an e-mailed statement today.

MF Global, the holding company for the broker-dealer run by former Goldman Sachs Group Inc. Co-Chairman Jon Corzine, filed for bankruptcy protection on Oct. 31, after making bets on European sovereign debt. Its broker-dealer unit, MF Global Inc., faces liquidation.

The firm listed debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed in U.S. Bankruptcy Court in Manhattan.

CME Group, the world’s largest futures exchange, is responsible for auditing clearing members such as MF Global under its authority as a self-regulating organization. It said on Nov. 4 it was in the process of transferring about 15,000 MF Global customer positions. Under a court order in the bankruptcy case, no funds or collateral not backing futures positions can be transferred to another futures broker.

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

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