Claims Trading Procedures
For the avoidance of doubt, these procedures do not relate to the transfer of claims to the Financial Services Compensation Scheme. For more information on transfers of claims to the Financial Services Compensation Scheme, please refer to their website, whose address is: http://www.fscs.org.uk/
This notice is provided by Richard Fleming, Richard Heis and Mike Pink of KPMG LLP, together the Joint Special Administrators (the “JSAs”) for MF Global UK Limited (in special administration) (“MFG UK”). The JSAs were appointed pursuant to a court order dated 31 October 2011 in accordance with the investment bank special administration regulations 2011.
If you think you have one or more claims against MFG UK, we, the JSAs, strongly advise you to take your own financial and legal advice prior to entering into a transaction with a third party in relation to one or more of your claims, in which such third party (the “buyer”) agrees to buy your claim from you (the “transaction”).
Please note that it has come to our attention that there are one or more parties holding themselves out as acquirers of claims against MFG UK that appear to be potentially misleading or dishonest in terms of their sales literature and offer. Sellers should be careful to check the identity and credentials of buyers before sharing personal or commercially sensitive information. Any suspicions should be reported to the Police and/or the FSA.
You may have a right to claim under the Financial Services Compensation Scheme (the “FSCS”). We strongly encourage you to contact the Financial Services Compensation Scheme, whose web address is: http://www.fscs.org.uk.
We do not hold ourselves out to be investment or financial advisors; however, when considering whether to enter into any transactions with such buyers, we would encourage you to consider the following carefully:
- Whether you might be able to recover a larger sum of your claim and/or recover more quickly through a claim under the FSCS;
- The amount of any discount the buyer entering into the transaction is offering you;
- Any offers made by other buyers and the amount of any discounts offered by them;
- The cost of the transaction;
- Any undertakings or assurances you may be asked to provide to the buyer, particularly if your claim has not yet been agreed by MFG UK; and
- To seek appropriate legal advice when entering into such transactions.
You should not place reliance on MFG UK or the JSAs with respect to transactions which you enter into with buyers in relation to your claims. MFG UK and the JSAs are only parties to such transactions to the extent that they register a transfer of the ownership of your claim from you to the buyer.
In addition, by becoming a party to such transactions, MFG UK and the JSAs:
- Do not take on any liability in relation to such transactions;
- Do not affirm the terms of such transactions;
- Do not agree the amounts claimed under such transactions;
- Do not make any representations in relation to the ultimate amount of or timing of the payout for your claims;
- Reserve all of their legal rights and remedies in relation to your claims, including those claims which you transfer to buyers in accordance with the procedure prescribed below
We, the JSAs, are aware that trading of claims related to Client Assets, Client Money and unsecured claims of MFG UK is beginning to occur in the markets. This is led by third party banks, dealers and global investment funds who approach you, as MFG UK claimants, for the transfer of your claims entitlements to them. Such third parties act as buyers (the “Buyers”) in a transaction in which you are the seller of one or more of your claims in exchange, usually, for a sum of money. While we do not take a view on the trading of claims, we are prescribing the following approach in order to standardize the process.
2. Transfer forms
In order to standardize the claims trading process and to reduce the administrative burden on MFG UK, we propose the use of standard form assignment documentation based on the Loan Market Association’s (LMA) standard secondary debt trading documentation, including a form of assignment (the ‘Assignment’) and the corresponding confirmation. Additionally, the JSA’s will require that the Buyers and the sellers of any claims must deliver a transfer notice, substantially in the form of which is set out in Annex A of the Assignment, to the JSA’s (the ‘Transfer Notice’) to evidence the transfer of your claims to the Buyer. Although it is not impossible, we would generally not challenge any transfer made under such documentation.
However, you should be aware that:
(i) in the event that you are deemed to be a net debtor to MFG UK, you shall remain liable to MFG UK and the claim which you have purported to sell to the Buyer shall be considered void from the outset; and
(ii) in the event that any Buyer attempts to use a set-off, offset or otherwise reduce its own or another party’s liabilities to MFG UK with a claim transferred to it by you, such transferred claim shall be considered void from the outset and reduced to a value of zero.
Claim transfer documentation
The following two on-boarding forms are ONLY to be completed by debt and claims traders wishing to purchase claims against MFG UK who have not previously been on-boarded. They are not intended for current creditors or clients of MFG UK. If you are in doubt about whether you need to provide this information, please contact email@example.com. For the avoidance of doubt, when providing information related to the on-boarding process, electronic copies of the documents are sufficient:
A TRANSFER OF YOUR CLAIM WILL NOT BE EFFECTIVE UNTIL ALL FEES LISTED IN SECTION 4 ARE PAID IN FULL.
3. Notice to buyers regarding know your customer and anti-money laundering obligations.
By purchasing a claim, Buyers will become subject to MFG UK’s standard Know Your Customer and Anti-Money Laundering policies. As such, no monies will be paid on transferred claims to Buyers until all Know Your Customer and Anti-Money Laundering checks on the Buyer have been completed.
For a transfer of your claim to become effective, all fees with regard to such transfer must be paid in full, to MFG UK, with immediately available funds. Evidence of payment of fees must be submitted with any Transfer Notice. Bank details can be found in the Transfer Notice.
(I) One-off fee for Buyers to cover estimated costs associated with Know Your Customer and Anti-Money Laundering requirements:
Depending on the type of entity they are, Buyers will be required to pay the following one-off fees to cover the costs associated with the completion of all Know Your Customer and Anti-Money Laundering checks on the Buyer.
a. An FSA regulated or EU passported entity trading for its own account: £1,000;
b. An FSA regulated or EU passported entity trading on behalf of an entity to which they are officially listed as the investment advisor or investment manager: £2,500.
c. An entity incorporated and regulated in the G-7 or European Union trading for its own account or trading on behalf of an entity to which they are officially listed as the investment advisor or investment manager: £7,500.
d. All other entities shall be charged at our discretion.
We reserve the right to increase such fees based on the complexity of a given case.
(II) Per transfer fee:
In order to complete the transfer of your claim, Buyers will be required to pay a standard per transfer fee as follows:
a. The standard per transfer fee shall be £2,000.
b. Such fee will be increased in instances of transfers to multiple Buyers to cover additional expenses.
c. We, in our sole discretion, may reduce such fees in the case of bulk transfers.
d. We reserve the right to increase such fees based on the complexity of a given case.
5. Claims transfer contact information
MF Global UK Limited (in special administration)
MF Global Claims
5 Churchill Place
Canary Wharf London