Safeguards Sought on Futures

From Associated Press

The Chicago Board of Trade said Tuesday that it will seek global safeguards to protect international futures and options investors from financial disasters such as the one that felled Barings investment bank.

The exchange will ask for a meeting with other exchanges and regulators from around the world to push for rules that would prohibit customer funds from being used to pay creditors of failed brokerage houses, said Patrick Arbor, chairman of the exchange.

Arbor also asked the Commodity Futures Trading Commission, the federal regulator of U.S. futures and options markets, to press for better international coordination of rules.


The move comes after Barings’ collapse. The 233-year-old British bank went under after it lost more than $1.46 billion on futures trades transacted on the Singapore stock market. A 28-year-old trader is being blamed for the losses.

Barings’ new owner, Dutch financial company ING Group, and exchanges in Singapore and Japan agreed to return customer funds that had been frozen in the aftermath of the collapse.

Arbor said he believes better coordination is needed among exchanges to protect investors’ money.