United Kingdom

Details

  • Service: Advisory, Transactions & Restructuring
  • Industry: Financial Services
  • Type: Business and industry issue
  • Date: 30/11/2011

MF Global UK - Clients and claims FAQs 

What is the position where I requested my account be closed and funds be remitted to me prior to the special administrators’ appointment?


There were a significant number of requests made to close accounts and transfer funds in the days preceding Monday 31 October 2011, that were received by MFG UK but not completed.  This may include circumstances where funds have not been paid to clients following such requests. Notwithstanding that these closure requests were made prior to the special administrators’ appointment, these accounts fall to be dealt with under the special administration process.


The special administrators are unable to action requests for withdrawals from client accounts, which are now subject to the formal procedures for dealing with such client assets set out in the special administration rules and the FSA’s Client Money Distribution Rules.


My funds were held in a segregated ‘client money’ account. Why can’t they be released immediately?

 

Notwithstanding their segregated status, these accounts require to be first reconciled and dealt with as part of the special administration process and in accordance with the FSA’s Client Money Distribution Rules. This process involves:

 

  • the identification of client money as distinguished from other MFG UK monies;
  • the transfer of client money into client money accounts under the control of the special administrators;
  • the determination of entitlements to client money; and
  • the efficient return of client money based on those entitlements.


There are also important legal decisions affecting the treatment of client money which are still being litigated through the English courts. Some of these issues may impact the correct legal treatment of client money at MFG UK and it may be necessary to wait until the Supreme Court rules on these matters (in the case of Lehman Brothers International (Europe)), which is expected in the first half of 2012.


Are my funds segregated?  Am I a segregated client?


The joint special administrators are unable to confirm at this stage whether any specific client(s) accounts have a segregated or non segregated status.  This will be assessed on a case by case basis as part of the claims process based on the contractual agreements between the client and MFG UK.  If you do not have a segregated claim, you may have an unsecured claim against MFG UK’s estate.


How long will the process to return client monies take?


The claims process commenced on 8 December 2011 and an overview of the process and claims forms are available here.

  

We and the MFG UK staff are actively working to reconcile holdings and accounts in order to enable client money to be released as soon as practicable (which is one of our formal objectives in the special administration process). Each client’s trade/position must be recorded in MFG UK’s systems and reconciled with the records kept by the market or exchange on which the trade was transacted. In some cases, the reconciliation must also involve other brokers and agents through which the business was placed. The early distribution of client money is high priority to the special administrators and the reconciliation process is a prerequisite before client money supporting client trades/positions can be released to accounts controlled by the special administrators.


Our investigations to date (which remain ongoing) indicate that some client funds were held at institutions outside the MF Global group. For example, this will include funds controlled by exchanges at which business is or was transacted by clients, which will be released after all open trades/positions are closed and reconciled. We are actively working to secure the release of these funds from these institutions, from which distributions to clients can be made. Good progress is being made to accelerate this process and some significant funds have already been recovered but a substantial proportion of these funds still remain to be collected.


The ultimate return of client money to clients will be dependent on the special administrators establishing the quantum of the claims against funds held in designated client money accounts (“the segregated client money pool”) and the non-segregated monies.  Upon the failure of a regulated firm, under the FSA’s Client Money Distribution Rules (CASS 7A) all segregated client monies must be ‘pooled’ together and distributed to clients in accordance with those rules (please click here for further information). 

 

I have provided security or collateral (segregated ‘client assets’) to MFG UK. Why can’t they be returned immediately?


We and the MFG UK staff are actively working to reconcile holdings and accounts in order to enable segregated client assets to be returned as soon as practicable, which, again, is one of our formal objectives in the special administration process.  We are also having to recover certain client assets that were held at third parties at the date of our appointment.


The return of a client‘s assets will not be finalised until the associated client risk positions have been liquidated or transferred and claims have been validated. Client assets are not subject to the ‘pooling’ arrangements which apply to client money. As with client monies, the claims process commenced on 8 December 2011 and an overview of the process and claims forms are available here

 

I would like to close my account now and have the funds / assets remitted to me – can this be actioned?


The companies are unable to action requests for withdrawals from client accounts – these are now subject to the special administration process. 

 
When might distributions be made? Should I make a claim?

 

The claims process commenced on 8 December 2011 and an overview of the process and claims forms are available here

 

I have open positions with MF Global – what is happening with these?


Please visit the ‘clients with open positions on 31 October 2011’ section of this website for further information.


I am no longer receiving daily statements, reporting or other notifications.  Why is this?


The clients of MFG UK will be aware that they are no longer receiving their usual daily statements, reporting or other notifications. This is to help ensure that clients do not place reliance on information that is potentially inaccurate. Any action or inaction taken on the basis of any information whatsoever other than that provided by the special administrators, is at your own risk and the special administrators will bear no liability.


I have received statement information since the administrators’ appointment.  Is this accurate?


Certain trade and/or position, price and cash balance data provided to clients since 31 October 2011 is not necessarily reliable (for example because information was not up to date or complete at that time) and you should not rely on it.  More accurate closing prices and statements of final trades and/or positions will be sent to clients in due course.


What is the next stage in the administration process?


A meeting of creditors and clients will be held on 9 January 2012 to consider the Joint Special Administrators’ Proposals and to consider establishing a creditors’ committee comprising representatives of creditors and clients.  Further details (including the Special Administrators’ Proposals) can be found here

 
Can I arrange to meet the special administrators? Can a member of the special administration team ring me?


MFG UK has some 10,000 clients. Logistically it is impractical for the special administrators to meet with or phone each client individually.  Unless you are invited to a meeting by the special administrators we would ask that you do not seek a meeting or request a call back.


How can I keep up to date with further developments?


Updates are being posted on this website.

 

 

 

While every reasonable effort is made to ensure that the information provided on the pages of this website concerning MF Global UK Limited (in Special Administration) and its Joint Special Administrators, MF Global Overseas Limited (in Administration), MF Global UK Services Limited (in Administration) and MF Global Finance Europe Limited (in Administration) and their respective administrators  (together the "MFG UK Estate") is accurate, no guarantees for the currency or accuracy of the website or information therein are made. The pages of this website concerning the MFG UK Estate and related material (or third party information), is provided ‘as is’. It is provided without any representation or endorsement made and without warranty of any kind, whether express or implied.
 
Please be aware that the MFG UK Estate and KPMG LLP, hereby exclude all liability for any claim, loss, demands or damages of any kind whatsoever (whether such claims, loss, demands or damages were foreseeable, known or otherwise) arising out of or in connection with the use of this website or the information, content or materials included on this website, including without limitation, indirect or consequential loss or damage, loss of actual or anticipated profits, loss of revenue, loss of business, loss of opportunity, loss of anticipated savings, loss of goodwill or loss of reputation. Nothing in this disclaimer excludes or limits the Joint Special Administrators', the Joint Administrators' or MFG UK Estate's liability for fraud or fraudulent misrepresentation or any liability which may not be limited or excluded by law.
 
The use of this website and any dispute or claim arising out of or in connection with this website (including non-contractual disputes or claims) is governed by English law and you irrevocably submit to the exclusive jurisdiction of the English courts.

 

 

MF Global special administration

The latest updates from the special administrators of MF Global UK Limited

 

Contact information

For all non-press enquiries on MF Global UK Limited please email the following:

 

Claim queries 

mfglobalclaims@kpmg.co.uk