July 21, 2009 

Received CFTC 

Records Section 

Mr. David A. Stawick 

Secretary to the Commission 

7/a.-t( o I 

Commodities Futures Trading Commission 

Three Lafayette Center 

1155 21 51 Street, N.W. 

Washington D.C. 20581 

secretary@cftc. gov 

C.F.T.C. 

OFFICE OF THE SECRETARIAT 

2009 JUL 21 fWI 9 55 

COMMENT 

Re: Investment of Customer Funds and Funds Held in an Account for Foreign Futures 

and Foreign Options Transactions, 74 Fed.Reg. 23962 (May 22, 2009) 

Dear Mr. Stawick: 

MF Global lnc. 1 ("MF Global") respectfully submits these comments regarding the Commodity 

Futures Trading Commission's ("Commission's") proposed amendments to Commission Rule 

1.25, Investment of Customer Funds, and Rule 30.7, Treatment of Foreign futures or Foreign 

Options Secured Amount. Given the financial market activity of the last year, MF Global 

recognizes the importance of the Commission's review of existing investment requirements and, 

as set forth below, we support many of the Commission's proposals and offer our comments with 

respect to others. 

Permitted Investments 

We are unaware of any problems encountered by any FCMs due to the scope or character of 

currently permitted investments so we believe that no limitation or other alteration is necessary 

Marketability 

We also believe that the definition of 'readily marketable' as set forth in SEC Regulation 15c3-1 

has proven adequate and so current regulations are sufficient. 

Rating Requirements 

The market's unprecedented fluctuations and the pronounced economic recession have raised 

valid concerns regarding adequate protection over customer funds. In one regard, however, the 

current rating requirements under Rule 1.25(b)(2) may be read to prohibit the use of discount 

notes issued by government sponsored enterprises because typically such notes are not 

independently rated. This is due to the frequency with which such notes are issued and their 

short dated maturities. In the market, they carry the implied rating of the issuer. The exposure 

from investing in these instruments is not significant and we believe would still be well within the 

Commission's intent to minimize risk. 

Additionally, Rule 1.25(b)(2) currently provides that the instruments described must have the 

highest short-term rating of an NRSRO or one of the two highest long-term ratings of an NRSRO. 

1 MF Global Inc. is a wholly owned subsidiary of MF Global Ltd. which, through its various 

affiliates, is a leading broker of exchange-listed futures and options with offices in Bermuda, New 

York, London, Chicago, Paris, Mumbai, Singapore, Sydney, Toronto, Tokyo, Hong Kong, Taipei 

and Dubai. We provide execution and clearing services for exchange-traded and over-the-counter 

derivative products as well as for non-derivative foreign exchange products and securities in the 

cash market. MF Global operates across a broad range of trading markets, including interest 

rates, equities, currencies, energy, metals, agricultural and other commodities. MF Global 

operates in 12 countries on more than 70 exchanges, providing access to the world's largest and 

fastest growing financial markets. 
We believe this could be further revised to require listed instruments with the highest short-term 

rating or the highest long-term rating of at least two NRSROs. 

Concentration Limits/Liquidity 

Overall, we believe that there should be diversity in investable client funds by asset class or 

sector, to further minimize credit, market, and liquidity exposure. Currently, Rule 1.25 permits an 

FCM may to invest 100 percent of customer funds in a single asset class. We believe this is 

acceptable with respect to US Treasury securities but we suggest a limit of 75% on agency 

securities and 25% on each other asset class. Such requirements would prevent an FCM from 

investing the majority of customer funds in one specific money market fund, or in one asset class 

such as corporate securities. 

To address the Commission's concerns over liquidity risk, we are not opposed to the Commission 

requiring a certain percentage of customer funds in more liquid investments, such as reverse 

repurchase agreements. 

Money Market Mutual Funds 

While most Money Market mutual funds have maintained liquidity and performed reasonably well, 

we believe increased transparency would benefit the industry overall. Rule 1.25(b)(4) does not 

currently regulate the nature of permitted money market mutual funds . We believe that 

investments in money market mutual funds should be limited to those funds that have at least 

weekly, if not daily reporting. This would assist in limiting exposure to a particular facet of the 

market. To further diversify risk, we also believe in limiting the investment of overall investable 

client funds to any one family of money market funds. 

Amendments to Rule 30.7 

We are not opposed to the Commission applying the requirements of Regulation 1.25 to 

investment of 30.7 funds, but recommend that this change only apply to investments made within 

the U.S. In some foreign markets, time deposits are a key vehicle for the investment of currency 

deposits but such investments are not allowable under Regulations 1.25. Indeed, in some 

jurisdictions, time deposit investments are required by the regulatory framework. We believe 

deposits held outside of the US should remain under the current 30.7 rules to allow for the 

practicality of managing currency deposits outside of the U.S and in consideration of foreign 

market convention. 

MF Global understands that the market experiences of the past year necessitate that the 

Commission reexamine all financial requirements to assure the protection of market participants 

and enhance risk management practices and the financial integrity of futures markets. We are 

very grateful for the opportunity to comment of these proposals and we are pleased to support 

many of them. If any member of the Commission or its staff has any questions, please contact 

Laurie Ferber, our General Counsel. 

Sincerely, 

Bernard W. Dan, CEO