CME To Allow Gold As Collateral For All Exchange Products
10/20/2009
LONDON -(Dow Jones)- U.S.-based clearing house CME Group Inc. (CME) will allow physical gold to be used as collateral for margin requirements on all exchange products, a spokesman said Monday.
The new global policy is effective Oct. 19 in accordance with a member's notice issued late Friday, said spokesman Jeremy Hughes in London.
Clearing member firms will be allowed to post up to a maximum of $200 million worth of gold as collateral to cover performance bond, or margin, requirements, Hughes said.
The policy was a byproduct of CME's recent launch of clearing services for over-the-counter London gold spot and forward contracts, he said.
"Many of the [trading] houses hold quite a lot of physical gold and would welcome using it more efficiently," he said.
The gold will be held at J.P. Morgan Chase & Co.'s (JPM) bank in London. 
-By Matthew Walls, Dow Jones Newswires; +44 (0)20 7842 9412; matthew.walls@ dowjones.com
SOURCE: http://www.campaignforliberty.com/wire.php?view=8175