August 20, 2012
Attain Capital
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We were glad to see last week’s announcement from the NFA that they will be requiring all FCMs to give always-on access to view their segregated accounts online. The fact that PFGBest was allowed to confirm seg funds through the mail (to an unconfirmed P.O. box, no less) is outrageous – and we still think a full investigation of the NFA needs to take place.
The segregated account structure is good, but it’s still possible that someone will figure out a way to get by the new electronic confirmations. Barring a perfect system, investors need a guarantee that if their money is stolen, there is some recourse to get it back – that’s why we’ve been calling for a SIPC-style insurance plan for the futures industry since last November. Now, it seems this proposal is finally being taken seriously. Via the Wall St. Journal:
Senior officials from CME Group Inc. on Thursday met with customers and futures industry leaders to examine the potential for establishing an insurance fund to safeguard traders…
Terry Duffy, executive chairman of CME, was among the participants at the meeting in Chicago, along with a top official from the Futures Industry Association, the main U.S. trade body for the sector. It also included representatives from brokerage firm RJ O’Brien and the Commodity Customer Coalition, a group formed following the October 2011 collapse of MF Global.
This is certainly an encouraging sign, though it is something that should have been implemented a long time ago. Still, we’re not ones to look a gift horse in the mouth. Now’s the time to keep the pressure up, to make sure that we get real action this time, and not just empty talk.
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September 12, 2012
My firm assists companies with improving corporate strategic and operational governance, risk, compliance and performance. I have read most of your recent blogs and must say that I am amazed and heartened by your ethics and candor in addressing the issues before your industry. From my perspective, your proposals are sound and implementable, and worth consideration. You are setting an excellent example, and I wish you continued success in achieving the reforms you seek.
Edward Kalbaugh, President/CEO, Allegent Advisors