Futures markets could get OTC-style safeguards
Futures market participants expect tougher - and more expensive - collateral protections to be introduced as a result of the MF Global debacle, and the CFTC is ruling nothing out
Futures markets could get new, tougher rules on the protection of client collateral as a result of MF Global's collapse – possibly modelled on the approach agreed for over-the-counter derivatives markets by the Commodity Futures Trading Commission (CFTC) in January. But it is a touchy subject – greater protection comes with greater cost, potentially hurting some of the smaller participants active in futures markets.
The existing segregation model in futures markets allows client assets to be
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