In a court filing today, MF Global Inc. (MFGI) Trustee James Giddens said CME Group has agreed to hand over more than $175 million to the trustee, the majority of which is earmarked to be returned to customers.
The funds in question include more than $160 million in Guaranty Fund Deposits and $13 million in House Origin Funds, as well as 12,000 shares of CME Group common stock and 35 memberships. The trustee will then liquidate the shares and memberships. CME Group already had returned customer funds; this represents MF Global assets held by CME Group.
CME Group has agreed to return nearly all of the funds, less $16.5 million it is holding as “Set-Aside Funds” for satisfaction of certain claims asserted under Exchange Rules. Of the funds being returned to the trustee, more than $130 million is earmarked for the benefit of former commodity customers of the failed broker-dealer and will be distributed evenly ($65 million to each) to those customers trading on domestic (4d property) and foreign (30.7 property) exchanges.
“This agreement supports my goal to expeditiously resolve outstanding conflicts with parties as we work to recover and distribute as much customer property as possible as quickly as possible, in a manner that is fair and consistent with the law,” Giddens said in a statement with the filing.
As part of the agreement, CME Group waived payment it otherwise would be entitled to under Exchange rules toward payment of customer claims. In exchange, CME Group’s claims will be treated as a priority class of claims in the SIPC case, “entitled to a higher priority than general unsecured claims, but a lower priority than customer claims.”
Regarding the agreement, Michael Shore, a CME Group spokesman, said, "We are pleased to have completed this process and look forward to the Bankruptcy Court’s approval of this plan. Such an agreement avoids the delay, risk and expense that would arise from any dispute to resolve the interpretation of exchange rules going forward. Therefore it helps us get as much money to customers as quickly as we can."