China

Details

  • Date: 11/7/2011

Statement from the Provisional Liquidators, MF Global Hong Kong 

Patrick Cowley, Fergal Power and Lui Yee Man were appointed Joint and Several Provisional Liquidators (the "Provisional Liquidators") by the High Court of Hong Kong S.A.R. on 2 November 2011 over the following companies:

 

MF Global Holdings HK Ltd

 

MF Global Hong Kong Ltd ("MFG HK", collectively, the "Companies")

 

Our appointment follows, amongst other things, the filing for bankruptcy protection by the Companies' ultimate parent company in the United States. As a result of this and other events, on 1 November 2011, the Securities and Futures Commission (the "Commission") issued a restriction notice to MFG HK (the "Notice"), which was subsequently varied by another notice dated 3 November 2011 and updated by a consent letter dated 3 November 2011(together with the Notice, the "Notices"). The Notices are attached for clients' reference.

 

The Notices restrict MFG HK from undertaking any licensed activities with immediate effect other than for the very specific exceptions listed in the Notices, which will facilitate the orderly closing out/ transferring to other brokers of MFG HK's clients' positions where possible.

 

Clients are encouraged to contact MFG HK as soon as possible to provide instructions in relation to the close out or transfer of their open positions. Instructions to transfer open positions should be made in writing.

 

Please note that MFG HK is not in a position to place new orders or open new positions for clients.

 

MFG HK will endeavour to carry out clients' instructions to the extent permitted under the Notices and the law. However, some transactions may involve the assistance from other third parties (including other overseas entities within the MF Global Group) in order to close out or transfer the positions. In such instances, we may not be able to fully give effect to clients' instructions as the Provisional Liquidators do not have any control over these entities. Should such instances arise, we will of course keep clients informed.

 

Update in relation to clients' open positions:

 

Cash equities - all open trades have been settled. Only one failed trade has been identified to date.

 

Futures and Options

 

a) HK Market - the open contracts of all of MFG HK's direct clients (with the exception of three MFG Omnibus accounts operated by overseas MFG affiliates) held at HKFE have been either closed out or transferred in accordance with clients' instructions. The Provisional Liquidators are actively seeking instructions in relation to the three Omnibus accounts.
b) Overseas Markets - MFG HK has relayed clients' instructions received to the overseas brokers (including MFG affiliates), and are currently discussing with the respective brokers the status of those transactions.
c) The Provisional Liquidators encourage clients to contact MFG HK as quickly as possible to transfer/ close out their open positions as the window for transfers/close outs is limited.

 

Client funds

 

The Provisional Liquidators have secured client funds held in Hong Kong bank accounts, and are in the process of recovering clients' funds elsewhere.

 

At this time, and until the reconciliation of client positions has been properly completed, the Provisional Liquidators are unable to pay out or transfer any proceeds/clients' monies. In this regard, we are currently ascertaining the final cash and securities positions for each client of MFG HK to complete the reconciliation exercise, and will advise clients further upon the completion of this exercise.

 

Sale of the business

 

Clients may have noted press articles in relation to the potential sale of MFG HK's business. This is an ongoing process, in respect of which we will keep clients informed.

 

Clients of MFG HK are encouraged to contact Ms Jasmine Lai on +852 2913 2539 or email mfglobalhk@kpmg.com should you wish to make any arrangements in respect of your positions with MFG HK or have any enquires.

 

The Provisional Liquidators will otherwise provide further updates and information in due course.

 

Yours faithfully

For and on behalf of MF Global Hong Kong Limited

 

Patrick Cowley

Joint and Several Provisional Liquidator

(Acting as agents without personal liability)

  

 

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