Bridging the Week: New Clearing Member Category; Above the Law; MF Global; FX Trading Front Running; Deliveries; EFRPs

CME Group proposed a new clearing membership category to help customers avoid the risk of receiving a pro-rata allocation of losses from their carrying futures commission merchant in the circumstance of the FCM’s insolvency and its inability to satisfy its obligations to all its customers in full. In addition, the Financial Industry Regulatory Authority warned its members not to take advantage of recent federal appellate court decisions that it claimed were incorrect in permitting member firms to bar customers and associated persons from taking advantage of FINRA arbitration forums to resolve disputes. Finally, two former senior officers of a global investment bank responsible for certain of its foreign exchange trading were named in a criminal complaint filed in a federal court located in Brooklyn, NY, related to their purported front running of the foreign exchange trades of a customer. As a result, the following matters are covered in this week’s edition of Bridging the Week:

  • CME Group Proposes New Clearing Member Category to Help Customers Avoid Pro Rata Distribution Risk in Case of FCM Insolvency (includes My View);

  • FINRA to Federal Courts: Our Rules Trump Your Decisions (includesMy View);

  • MF Global and Individual Defendants Finalize Settlement With Customers and Other Creditors;

  • Global Head of FX Cash-Trading Desk of Global Investment Bank Arrested for Front Running (includes Legal Weeds);

  • CME Group Sanctions Market Participants for Mishandling a Delivery, a Non-Bona Fide EFRP, a Transitory EFRP and Disruptive Trading (includes Compliance Weeds);

  • CFTC Staff Suggest Measures by Clearinghouses to Enhance Recovery and Wind-Down Plans;

  • UK FCA Recognizes Value of Dark Pools but Urges More Public Details Regarding Operations and Conflicts of Interest; and more.

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