The implosion of MF Global was a seismic event for the entire futures markets, including the top SROs.

The fact that a broker-dealer could simply lose $1 to $1.2 billion in customer money without a clue as to how it happened continues to boggle the mind. As does the fact that a CEO could run so thoroughly roughshod over his firm's risk management apparatus. Inevitably, this raises questions about supervision, which is now bringing the CME Group into the spotlight.

According to the Financial Times, "The largest U.S. futures exchange operator audited MF Global's futures broker business before the discovery that as much as $1.2 billion in clients' funds went missing in the aftermath of its bankruptcy." This has created "a crisis of confidence in the futures markets. That has not only dented CME's reputation, but has also depressed the exchange group's trading volumes. Some lawmakers are asking whether the self-regulatory framework that let CME supervise MF Global and dozens of other futures commission merchants (FCMs) should be changed."

I seriously doubt that the SRO concept will be meaningfully challenged. At this point, there is no alternative, but regulators are right to raise questions. The CME needs to fully explain how this could happen on its watch. The CME Group will no doubt rise to this challenge. The FT notes it has a sophisticated lobbying machinery in place in Washington. The SRO will no doubt portray the firm as a rogue bent on breaking rules to commit fraud, which it may well have been.

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