CME Group Inc. (
), the world's largest futures market operator by contract
volume, announced Thursday a $100 million fund to protect
agricultural customers, a move to rebuild lost confidence after
the collapse of MF Global Holdings LP.
The money will be made available to U.S. family farmers and
ranchers who are using CME's futures markets to hedge their crops
and livestock. These food producers have been particularly harmed
by MF Global's failure, in which a clearing firm violated the
U.S. Commodity Futures Trading Commission regulations and misused
customer money that should have been kept segregated.
CME said the fund will be in effect starting March 1, but will
not make the money available to MF Global victims.
"Though all the facts are not yet in, we do know our industry
needs to focus on enhancing protections for customer segregated
monies held at the firm level," said CME Group Executive Chairman
Called the Family Farmer and Rancher Protection Fund, it is
expected to be backed by insurance and will reimburse farmers and
ranchers using CME products up to $25,000 per account in the case
of losses resulting from the future insolvency of a clearing
member or other market participant. Cooperatives will be eligible
for up to $100,000 per account and participants will receive
pro-rata share of the payouts if claims top $100 million
Criticism from clients and lawmakers for CME's poor oversight
over MF Global, coupled with banks deleveraging and reducing
trading, has impacted the company's business.
CME said Thursday its January volume of 11.6 million contracts
per day was down five percent from January 2010.
CME Group Inc. (
) shares are up $14.06 or 5.73 percent, at $259.54 in Thursday