Re Hypothecation explained - Casey Research

Discussion in 'Retail Brokers' started by Nick29, Dec 15, 2011.

  1. Nick29


  2. Daal


    The article says rehypothecation is used by Broker Dealers. Problem is MF Global did not had(to my knowledge) any client money in his broker dealer, they raised money in the repo markets there. The client money was in the FCM which only allows the funds to be invested in securities listed in the rule 1.25

    I would like to know which specific line of rule 1.25 allows for risk taking using customer funds or for the funds to be used for a different corporation's liquidity. Without that all this rehypo stuff are just conspiracy