CME's clearing member, Refco, LLC, is a subsidiary of Refco, Inc., but is a separate company with its own accounts, assets and customers. These accounts, assets and customers are protected through a comprehensive federal statutory and regulatory regime and other financial safeguards and risk management protections provided by the CME Clearing House. All customer funds are required to be segregated from firm assets, held in specially identified accounts and are not subject to any creditors' claims against the firm.
Refco, LLC, the CME clearing member has met and continues to meet all of its obligations to CME and remains in good standing. Additionally, CME's Risk Committee has restricted Refco, LLC from withdrawing capital (including current excess capital) from Refco, LLC without CME's permission and has required Refco, LLC to submit weekly capital computations and segregated funds computations to CME. CME audit and financial surveillance staff are also monitoring current activities within the firm, including customer-segregated balances, on a real-time basis.
CME's risk management and financial surveillance techniques are comprehensive and specifically designed to:
-- Prevent the accumulation of losses through CME's twice daily mark-to-
market and settlement variation payment process. All payments to and
collections from clearing members are made in "same-day" funds.
-- Ensure that sufficient resources are available to cover future
obligations through the payment of both minimum initial and
maintenance performance bonds and with high quality collateral
specified by CME.
-- Result in the prompt detection of financial and operational weaknesses
affecting any CME clearing member firm.
-- Allow swift and appropriate action to be taken to rectify and
financial problems and protect the clearing system.
Further information regarding the CME Financial Safeguard System can be found at www.cme.com/financialsafeguards .
Chicago Mercantile Exchange Inc. (www.cme.com) is the world's largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on CME Globex electronic trading platform and on its trading floors. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.6 billion per day in settlement payments in the first half of 2005 and managed $43.7 billion in collateral deposits at June 30, 2005, including $4.0 billion in deposits for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME), which is part of the Russell 1000(R) Index.
Statements in this news release that are not historical facts are forward- looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which can be obtained at its Web site at www.sec.gov. We undertake no obligation to publicly update any forward- looking statements, whether as a result of new information, future events or otherwise.
Chicago Mercantile Exchange, CME, the globe logo and CME Globex are registered trademarks of Chicago Mercantile Exchange Inc. E-mini is a trademark of CME. CLEARING 21 is a registered trademark of CME and New York Mercantile Exchange, Inc. S&P, S&P 500, NASDAQ-100, Nikkei 225, Russell 1000, Russell 2000, TRAKRS, Total Return Asset Contracts and other trade names, service marks, trademarks and registered trademarks that are not proprietary to Chicago Mercantile Exchange Inc. are the property of their respective owners, and are used herein under license. Further information about CME and its products is available on the CME Web site at www.cme.com.
