Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Exchanges Reduce Margin Requirements for MF Global Customers

MF Global website
Bloomberg | Getty Images

Two big commodities exchanges have acted to mitigate the effect of collapse of MF Global on the failed firm’s clients.

Many MF Global customer accounts were moved to new brokers. But because the many customer assets are missing or in frozen accounts, some initially had to post additional margin assets to meet the margin requirements of the CME Group and ICE.

Over the weekend, both CME and ICE reduced the margin requirements of MF Global, according to Reuters.

Market participants feared that the need to meet margin requirements would result in a sell-off of commodities, such as oil or wheat.

"Essentially, you were asking people to post double margins. The margin that was frozen by the courts in MF Global accounts and the margin with the new brokers," a person familiar with the changes said.

The changes to the margin requirements are meant to be temporary.

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