The National Futures Association is terminating its technology provider relationship with AlphaMetrix, Chicago, which recently released a letter revealing cash flow issues. As of Oct. 29, the relationship will terminate and the banks will transmit information directly to the Chicago Mercantile Exchange Group, which will send to the NFA.
In responding to questions about the system, an NFA spokesperson responded:
"NFA and CME developed the daily segregation confirmation system last fall in order to significantly strengthen our ability to monitor customer segregated funds. In order to get the system up and running as quickly as possible, NFA and CME looked to a third-party provider to perform one discrete function of the system that NFA and CME could not quickly build in-house. AM360 had the ability to deliver this function much faster than NFA and CME could build this particular function. The function was simply a data aggregation function. The guts of the entire daily confirmation system (the analysis of the bank data and the comparison of the bank data to the daily FCM reports) were built by CME and NFA. Just one piece was outsourced.
NFA and CME always planned to bring this function in-house. Discussions and plans for this transition had been ongoing for several weeks. Recent events accelerated the transition. Because the planning for this transition had already started, NFA and CME are in a very strong position to take this discrete function in house in a matter of weeks ensuring that there will be absolutely no disruption to the daily segregation confirmation system."