Futures Commission Merchant Regulation - Comment Letter - NewEdge/MF Global - December 2, 2010

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Dodd-Frank Timeline, Investment of Customer Funds
Final Rule Issue Effective Date Compliance Deadline
December 19, 2011 February 17, 2012 June 18, 2012

Investment of Customer Funds and Credit Ratings
December 2, 2010

NewEdge and MF Global believe the proposed amendments:

  • "are unnecessary, considering that the current permissible investments under Rule 1.25 have not, to our knowledge, resulted in any FCM's inability to provide customers their segregated funds upon request, or to continue as a solvent entity,
  • will, in many cases, create new investment risks and logistical difficulties for FCMs, and
  • may well change the pricing dynamics for customers and the industry at large."

Among the entities' arguments:

  • The proposed amendments could substantially decrease the number of FCMs, which would reduce competition.
  • They will have an "anticompetitive impact" on the industry.
  • Current rules regarding investments do not put customer funds at risk.
  • Many proposed amendments will create "new investment risks and logistical difficulties" for FCMs.


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