CME creates a 100 m$ fund to protect farmers and ranchers against MF style robbery

Discussion in 'Commodity Futures' started by TraDaToR, Feb 3, 2012.

  1. TraDaToR


    February 2, 2012

    To Our Valued Customers,

    Today CME Group announced that it will establish a $100 million fund to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets.

    We understand that many have been hurt by MF Global's bankruptcy - including many farmers and ranchers who were impacted in their ability to buy seed to plant for next year's crop or feed and raise the livestock that sustain our country. In light of the MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country's food producers who are using our markets to hedge their crops and livestock that feed the world. Under the terms of the Family Farmer and Rancher Protection Fund, expected to be in effect by March 1, 2012, farmers and ranchers using CME Group products will be eligible for up to $25,000 per account in the case of losses resulting from the future insolvency of a clearing member or other market participant. Farming and ranching cooperatives also will be eligible for up to $100,000 per cooperative. If losses in a future failure total more than $100 million, participants will be eligible for a pro-rata share of the fund, up to $100 million. This new fund is expected to be backed by an insurance policy and will not be available retroactively. More information is available in our news release.

    The fund announced today is the first step in what will be a series of enhancements that our industry will undertake to strengthen customer protections. We fully understand the need for a holistic solution to restore confidence in the marketplace, and will continue to actively work with the industry to develop recommendations. As always, CME Group will post updates throughout this process on our website,

  2. So a special class of customer gets segregated fund insurance and the rest of us can just go drop dead.

    Clear cut discrimination.

    Hey CME, wake up. No half a** measures. Segregated fund insurance for all customers or no customers.
  3. TraDaToR


  4. Farmers receiving tens of billions in subsidies annually is not enough apparently.
  5. mickmak


    fairness aside.. at the end of the day, what do you folks produce?? Please don't tell me its some value/service.

    If world is to fall a part, you need farmers to grow food, but you won't need bankers to finance or locals to speculate.
  6. Eight


    I bet you can't wait for that glorious day! The day when the below average IQ guy with a hoe is king!!
  7. emg


    Farmers deserved to get the so called CME-SIPC. They are in the market to HEDGE


    A typical hedger might be a commercial farmer. The market values of wheat and other crops fluctuate constantly as supply and demand for them vary, with occasional large moves in either direction. Based on current prices and forecast levels at harvest time, the farmer might decide that planting wheat is a good idea one season, but the forecast prices are only that — forecasts. Once the farmer plants wheat, he is committed to it for an entire growing season. If the actual price of wheat rises greatly between planting and harvest, the farmer stands to make a lot of unexpected money, but if the actual price drops by harvest time, he could be ruined.

    Farmers are not speculators. Small Traders should not be trading in the futures market less than $100,000 account. Too bad SMALL TRADERS are losing. Too bad.

    More than 90% of small traders lose. They just lose!
  8. mickmak


    Commodities market was created for consumers and producers of the actual commodities to hedge prices. not some speculators to make a gain from nothing. any reforms in the market won't change what is fundamentally wrong with the market - too many participants with no real interest in the end commodity.

    and don't be no hater... I trade as well, but I think the market is f'd up b/c large accounts with no real interest can alter market conditions. I.e. $10B hedge fund can move oil market without any end interest in oil. What does that create for the society when the game is zero sum?

    well.. time to short some more oil as no reason for oil to ride higher due to today's unemployement report. I feel like such a creator of product/service/jobs/and etc. haha...
  9. TraDaToR


  10. Mvector


    you talking about all large corporate farms? they don't need any special treatment at this point.

    if this measure is only for true family operations then I don't mind a business entity - cme group - making their own rules for this matter.

    it would be nice to see cme group protect all trading accts - who provide their income through our trade flow day after day.
    #10     Feb 10, 2012