Commodity Futures Trading Commissioner Mark Wetjen said on Thursday an insurance fund for futures traders is "worth exploring," raising the profile of a customer-protection concept that gained new life after MF Global failed one year ago.
The futures industry has debated the merits of a government-sponsored insurance fund for futures traders, modeled after the Securities Investors Protection Corporation (SIPC), and an industry-sponsored bailout fund since MF Global's collapse revealed more than $1 billion missing from customer accounts.
Neither response would prevent a broker's misuse of customer funds, as happened with MF Global. The brokerage, led by former Goldman Sachs chief and New Jersey Gov. Jon Corzine, failed after revelations that it had made a bad bet on European sovereign debt sparked a liquidity crunch.
However, some type of insurance could help restore shattered faith in the industry, helping allay fears that money parked at futures brokerages is not safe,
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