CFTC might approve ‘Corzine rule’
Following the scandal at Peregrine Financial Group Inc. (PFGBest), the Commodity Futures Trading Commission (CFTC) is expected to approve a new regulation that requires top executives to give approval before firms dip into customer accounts.
Dubbed the “Corzine rule” after an October scandal at MF Global, the new regulation is said to have the support of three CFTC members and the backing of the National Futures Association (NFA), according to Reuters.
The Corzine rule would require brokers to get written approval from the CEO and chief financial officer of a firm before withdrawing more than 25 percent of a customer’s excess funds, according to Reuters.
After discovering that PFGBest had lost about $220 million of customer money on Monday, the NFA froze the company’s accounts. Later on Monday, the company filed for Chapter 7 bankruptcy.
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