KPMG has seen over 650,000 MF Global open positions closed since the UK business was placed into administration on Monday 31 October.
On the close of business that day, there were 1.61m open positions across over 10,000 clients. By the close of Friday there were 954,000 open positions left after transfers and forced liquidations.
In addition, as of Friday, the entire customer FX portfolio of 25,000 trades has been unwound representing a notional value of some $60bn. The spread betting and CFD customer positions have also been closed with the firm awaiting total values.
Where KPMG is able to be definitive about forced liquidations as a result of data provided by exchanges, it has contacted clients directly. As of Friday KPMG had contacted more than 1,200 clients, though at this stage there is still a huge amount to do before definitive answers can be provided individually as each case is different and complex. However, this is a priority and work is continuing this week.
The process of default and close-out is inevitably difficult and is different in relation to the many markets in which the company operated. Defaults have taken place at different times for different markets and as a result it has not been possible to provide accurate information regarding the status of client positions. To assist clients in understanding which exchanges and clearing houses have defaulted the company, a summary of the position is available on the website www.mfglobal.co.uk.
Where possible, however, many holdings have been transferred to new brokers through the combined efforts of a large team of sector and insolvency specialists at KPMG and the MF Global staff who have all been retained in this initial phase.
Richard Fleming, administrator, said: “Good progress is being made and we are working incredibly hard to deal with clients as quickly and efficiently as possible. This is a complex process where we are helping clients get clarity on their positions if they have been closed down or - where possible - assisting them with the transfer of trades.
“We would like to thank the UK staff of MF Global for their continued support and diligence in getting this work done.”
KPMG is currently working to reconcile the cash positions of the firm prior to making any distributions. Further announcements will be made to customers regarding the process for registering claims against the firm as soon as possible.
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Notes to Editors:
Richard Fleming, Richard Heis and Mike Pink of KPMG LLP were appointed joint special administrators of MF Global UK Limited, a UK based broker-dealer business, and MF Global UK Services Limited, which provides employee and pension services in relation to the UK operations, at 5pm on Monday 31st October 2011. MF Global UK Limited is a wholly owned subsidiary of MF Global Europe Limited which in turn is a subsidiary of MF Global Holdings Limited, a company incorporated in Delaware, USA, which filed for chapter 11 bankruptcy protection on 31st October.
The objectives of the administration are:
- To ensure the return of client assets as soon as is reasonably practicable;
- To ensure the timely engagement with market infrastructure bodies and the Authorities pursuant to regulation 13; and
- To either rescue the Investment Bank as a going concern or wind it up in the best interests of creditors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.