New rules proposed by U.S. regulators will increase costs and inflict long-term damage on commodity futures brokers and their customers, INTL FCStone Inc executives said on Thursday, adding to growing industry criticism of the plan. A new regulation, included in the landmark Dodd-Frank financial reform act but not yet enforced, would require futures brokers "at all times" to have funds that exceed the sum of customer deficits. After the abuse of customer funds at failed brokerages MF Global and Peregrine Financial, regulators say the rule will help protect customer money by preventing the use of extra funds from one customer to cover temporary shortfalls of another. But brokers say it would upend practices that allow them to credit the excess funds of some customers against the deficits of others for short periods, reducing costs for all traders while protecting funds from improper use. Futures commission merchants now face a dilemma: take on the additional financial burden
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