MF Global customer advocate calls on Congress

Mr. Roe goes to Washington

On the bankruptcy side, it recommends establishing a legal right for customer representation on creditors’ committees in FCM Chapter 11 cases, preventing the application of Safe Harbor provisions in cases where customer segregated money is involved and applying market forces to determine attorney and trustee fees in bankruptcy proceedings.

In its summary the CCC states, “MF Global's failure has shattered that notion and exposed tremendous shortcomings in the system designed to protect customer assets. For this reason, the collapse of MF Global deserves a robust policy response which amends the existing regulatory structure and contemplates new mechanisms in order to strengthen the safeguards which protect customer property.”

To emphasize this, it points out that the amount of excess customer funds held at FCMs has dropped considerably in the last year.

 

 Read the complete CCC report.

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