$100 Million Fund Established to Protect Cattlemen
US - Last week, CME Group Inc. (CME) established a $100 million fund to protect farmers and ranchers who utilise CME. Cattlemen attending the 2012 Cattle Industry Convention heard from Bryan Durkin, CME chief operating officer, who said on behalf of CME that they felt an “inherent” responsibility to help their customers. He said there is more to be done.
7 February 2012
2 minute read
“We are in unchartered territory,” said Mr Durkin. “There are a lot of facts that still need to be sorted out. We took an important first step for farmers and ranchers.”
Mr Durkin said MF Global found a way to manipulate a system that has been working flawlessly for 75 years.
The fund will not help former MF Global customers who haven't received all their money as a result of the bankruptcy. There is an estimated $1.2 billion shortfall in customer segregated accounts. Mr Durkin said customers with accounts in the United States have received about 72 cents on the dollar.
Under the new fund, farmers and ranchers will be eligible to receive up to $25,000 per account if they lose money resulting from the bankruptcy of a clearing member. Mr Durkin said farming and ranching cooperatives will be eligible for up to $100,000 per cooperative. He said if losses are more than $100 million, those customers will be eligible for a pro-rate share of the fund up to $100 million.
Mr Durkin said doing everything possible to prevent a repeat of MF Global is top priority for CME.
“All viable solutions should be explored. We understand the significant risk you face every day,” said Mr Durkin to the room full of cattlemen and women. “It is our responsibility to restore your confidence. We will work with industry groups including the National Cattlemen’s Beef Association (NCBA) to explore options to give farmers and ranchers more protection.”
NCBA Vice President of Government Affairs Colin Woodall was pleased by CME’s recent actions. He said it is a good first step and speaks volumes for CME’s commitment to protect their customers. Mr Woodall added that CME took this step on its own accord.
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