In response to questions about its oversight of customer funds, the self-regulatory authority for the futures industry yesterday approved a rule that would allow the designated regulator of a futures commission merchant to check customer accounts online without seeking the broker's permission first.
The board of the National Futures Association on Thursday approved a rule that would allow designated regulators to check customer funds over the Internet. If a broker cannot provide for online access to its bank and segregated accounts, it would not be allowed to hold customer funds. The rule adopted by the NFA will now go to the Commodity Futures Trading Commission for final approval.
The rule comes after customers suffered heavy losses from the failures of Peregrine Financial and MF Global. The collapse of MF Global, with $1.6 billion in missing customer funds, and Peregrine Financial Group, which had a shortfall of $220 million in customer accounts, has led to criticism about oversight
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