Safety of Funds
The funds in your account with Dorman Trading are held as “Customer Segregated” funds. Our principal bank is Harris, NA, a subsidiary of BMO Financial Group of Toronto Canada. The segregated funds that Dorman holds at Harris, are primarily invested in US Treasury Bills, with the remainder in cash or deposited with the Chicago Mercantile Exchange as margin deposits. The Treasury Bills at Harris are specifically identified to Dorman and on Dorman’s books they are specifically identified to those accounts that have asked us to invest their funds.
The segregated account structure of your futures trading account protects you from suffering a loss, should your broker, your clearing firm, Dorman, or Harris file for bankruptcy. This segregated structure means that your funds on deposit are not subject to any offset, indebtedness, obligation, or the liabilities of any entity besides the customers themselves. These regulations are in place so that neither your clearing firm, Dorman, nor their bank Harris can dip into the customer segregated funds to offset losses elsewhere.
In the interest of transparency, please find links below to Dorman Trading audited financial reports:
CME Group Clearing
The safety and security of the Chicago Mercantile Exchange clearing process is described below:
CME Group’s centralized clearing capability and comprehensive set of risk management services provide the security, transparency and confidence the market participants need to operate, invest and grow.
Additionally, CME Group’s audit department routinely inspects the books and records of clearing members to ensure compliance with these regulations.
Performance bond requirements. Each of our customers is required to put up a “good faith deposit,” or performance bond, to cover the maximum likely loss a position could suffer between each mark-to-market cycle. In turn, our clearing member firms must post to CME Clearing at least the maintenance performance bonds for all positions carried. Performance bonds are calculated by our Standard Portfolio Analysis of Risk (SPAN) system that today is used by over 50 exchanges and clearing organizations around the world, making it the global standard for portfolio margining.
Twice daily mark-to-market process. Accumulation of debts/losses is limited and transparency is achieved as CME Clearing marks your positions to market twice daily, once in the morning and again in the late afternoon, so you always know where you and your customers stand.
24-hour monitoring by an experienced risk-management team. Over 120 employees on the CME Clearing and Audits Risk staff use a variety of sophisticated tools to carefully observe risk 24 hours a day, six days a week. These teams work closely with Products and Services, Market Regulation, Legal and other divisions across the exchange as well as our clearing members to help clients manage risk during periods of unprecedented growth and at times of economic uncertainty.
For More Information
For questions related to Financial Safeguards, please contact CME Clearing at 312-930-3170.