NAMA Calls on Congress to Limit Futures Market Risk Exacerbated by the MF Global BankruptcyDecember 8, 2011
WASHINGTON, D.C. – December 8, 2011 – The North American Millers’ Association (NAMA) called on Congress yesterday to take action and limit futures market risk, exacerbated by the MF Global bankruptcy, to millers and other futures market participants. MF Global, a major global financial derivatives broker, filed for bankruptcy in October 2011. In a letter NAMA sent to the House and Senate Agriculture Committees NAMA stated, “Millers and other futures contract participants are experiencing a crisis of confidence in the markets as a result of the MF Global situation.” NAMA pressed the point that segregated customer funds are sacrosanct and that millers and similar hedgers should be the first in line when MF Global funds are disbursed.
NAMA called on Congress to immediately:
- Direct CFTC to immediately enact rules requiring customer segregated funds be kept in escrow accounts, in cash or very liquid government-backed instruments.
- Affirm that legislative intent underlying relevant statutes in this area call for the first priority for funds from segregated accounts is they be distributed to the customers that deposited them.
- Direct the CFTC to conduct an immediate audit, or the agency should request third party audited statements of all brokers and Futures Commission Merchants to ensure confidence that customer funds remain segregated.
- Study the creation of an industry insurance fund to cover commodity futures contracts.
- Conduct a complete review of CFTC audit procedures.
NAMA is the trade association representing 42 companies that operate 172 wheat, oat and corn mills in 38 states and Canada. Their collective production capacity exceeds 175 million pounds of product each day, more than 95 percent of the total industry production.
Contact: Terri Long, NAMA, [email protected]
The North American Millers’ Association prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact NAMA at 202.484.2200 (voice and TDD). To file a complaint of discrimination, write to Mary Waters, President, 600 Maryland Avenue SW, Suite 825W, Washington, DC, 20024 or call 202.484.2200 ext. 12. NAMA is an equal opportunity provider and employer.