Division of Clearing and

Risk

Division of Swap Dealer

and Intermediary

Oversight

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

115521 st Street, NW, Washington, DC 20581

Telephone: (202) 418-5000

Facsimile: (202) 418-5547

aradhakrishnan@cftc.gov

gbarnett@cftc.gov

Ananda Radhakrishnan

Director, DCR

Gary Barnett

Director, DSIO

November 2, 2011

Laura C. Klimpel, Counsel and ChiefCompliance Officer

New York Portfolio Clearing

55 Water Street

New York, New York 10041

Re: Notification of Post-Relief Transfer Pursuant to Commission Regulations 190.02(a)(2) and

190.06(g)(2)(i)

Dear Ms. Klimpel:

This letter is in response to your letter, written on behalf of New York Portfolio Clearing

(NYPC), dated November 2, 2011 (the NYPC Letter), notifying the Commission of NYPC's

transfer of certain customer positions as a result of the insolvency proceedings of MF Global,

Inc. (MF Global), one of its clearing members. The NYPC Letter is pursuant to Commission

Regulation 190.02(a)(2), which requires a clearing house, prior to transferring customer positions

under Section 764(b) of the Bankruptcy Code, to notify the Commission of its intent. If the

Commission is so notified and does not disapprove pursuant to Commission Regulation

190.06(g)(2)(i)(B), such transfer may not be avoided by the bankruptcy trustee.

In order to minimize disruption to the markets and to protect the integrity of the

marketplace and market participants, NYPC proposed transferring certain MF Global customer

segregated account positions. In particular, NYPC intends to transfer positions carried on its

books for [ ] and [ ] to [ ] and

[ ] , respectively, and intends to work diligently to effect the transfer of

the accounts of [ ] and [ ] to [ ] and

[ ], respectively.

The Division of Clearing and Risk (DCR) and the Division of Swap Dealer and

Intermediary Oversight (together with DCR, the Divisions) have reviewed the NYPC Letter.

Under Commission Regulation 190.06(g)(2)(i)(B), if the Commission does not disapprove the
Laura C. Klimpe1

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transfer, such transfer may not be avoided by the bankruptcy trustee. Acting pursuant to the

authority delegated to it by Commission Regulation 190.1 O(d), the Divisions hereby notify you

that the Commission does not disapprove the transfer of the positions set forth in the NYPC

Letter in the manner described therein. In addition, in the event that one or more of the transfers

are not permissible under Commission Regulation 190.06(g)(2)(i)(B) on the grounds that they

are deficit accounts, the Commission authorizes such transfers under Commission Regulation

190.06(h)(2).

The Commission reiterates that customer segregation is the foundation of customer

protection in the commodity futures and swaps markets. Segregation must be maintained at all

times, pursuant to Section 4d of the Commodity Exchange Act (the Act) and Commission

Regulation 1.20. As mentioned above, MF Global does not have sufficient funds in segregation

to meet Commission requirements. The Commission intends to take any and all action afforded

to it, within the purview of the Bankruptcy Code and the Act, to ensure that customers maximize

their recovery of funds and to discover the reason for the shortfall in segregation.

This letter is based upon the representations of NYPC and applicable laws and

regulations in their current form. If you have any questions concerning this correspondence,

please contact Jon DeBord, Special Counsel, DCR, at 202-418-5478 or jdebord@cftc.gov.

Sincerely,

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