China

Statement from the Provisional Liquidators, MF Global Hong Kong Limited (Provisional Liquidators Appointed) (“MFG HK”) 

This is an update following our notice to clients on 11 November 2011.

 

Further update on clients' open positions:

 

Futures and Options

 

a) HK Market

 

The open contracts of all of MFG HK's direct clients (with the exception of one MFG Omnibus account operated by an overseas MFG affiliate) held at HKFE have been either closed out or transferred in accordance with clients' instructions.

 

The Provisional Liquidators have been actively seeking instructions in relation to the one MFG Omnibus account but have not received any further instructions since our last update. MFG HK is only able to take instructions from the contractual account owner, ie the relevant MFG affiliate, and we therefore urge that the underlying clients of the Omnibus account place instructions with the relevant MFG affiliate for onward instruction to MFG HK. The SFC has lifted its restriction period for the transfer or close out of Hong Kong futures and options. However, as it has now been some time since our appointment, the Provisional Liquidators have, in the continuing absence of instructions from the Omnibus account holder, reserved our right to commence an orderly liquidation of outstanding positions to limit further market risk to MFG HK.

 

b) Overseas Markets

 

In respect of the transfer and close out instructions received to date for clients' positions on overseas exchanges, our clearing brokers have continued to liaise with the receiving brokers to process transfer requests that they have already received. We await their update and confirmation of the current status of these transfers.

 

For the outstanding positions where MFG HK has received no instructions, we have been advised by our overseas brokers for the exchanges detailed in the table below that they will no longer accept further instructions from MFG HK and will proceed to liquidate the remaining positions. As such, any new instructions to transfer or close out open positions are now unlikely to be processed. We will inform affected clients of the impact of such action as soon as we are in a position to do so.

 

 

Exchanges

Deadline for instructions to be received

London Metal Exchange

08 November 2011

NYSE London International Financial Futures and Options Exchange

11 November 2011

International Petroleum Exchange

07 November 2011

ICE US

11 November 2011

NYL US

11 November 2011

Chicago Board of Trade (CBOT)

11 November 2011

Chicago Mercantile Exchange (CME)

11 November 2011

 

Client funds

 

The Provisional Liquidators are continuing with the process of seeking the return of clients' funds located overseas. The Provisional Liquidators have asserted MFG HK's rights over clients' funds and other receivables held by brokers overseas, and are actively seeking the repatriation of these funds. The completion of this process is likely to take some time. The Provisional Liquidators will continue to press for an early return of all MFG HK clients' funds.

 

The Provisional Liquidators are investigating the issues and steps required to be completed in order to expedite the return of clients' funds under the relevant Hong Kong laws and regulations.

 

Clients of MFG HK are encouraged to contact Ms Jasmine Lai on +852 2913 2539 or email mfglobalhk@kpmg.com should you 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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