MF Global UK Calls in KPMG Administrators
The High Court in UK has appointed KPMG administrators to wind up the trading of MF Global UK Limited, a broker-dealer business.
Earlier this week, the Financial Services Authority approved the Special Administration Regime entered into by MF Global UK. The Special Administration Regime came into force in February 2011 to ensure the return of client assets as soon as practicable; ensure timely engagement with market infrastructure bodies and the authorities; and either to rescue the firm as a going concern or wind it up in the best interests of the creditors.
The appointment follows the filing of MF of chapter 11 bankruptcy protection by MF Global Holdings Limited and MF Global Finance USA Inc on 31 October 2011.
The High Court appointed Richard Fleming, Richard Heis and Mike Pink of KPMG LLP as joint special administrators of MF Global UK upon the application by the directors of MF Global UK Limited.
The special administrators have also been appointed as joint administrators of MF Global UK Services Limited, which provides employee and pension services in relation to the UK operations.
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.
“Against the backdrop of challenging market conditions and the Eurozone crisis, the financial position of MF Global UK has significantly deteriorated in recent weeks,” said Richard Fleming, who commented on behalf of the administrators.
Following the filing for Chapter 11 by MF Global Holdings USA Inc, it would not be viable to operate MF Global UK Ltd on a standalone basis, according to the administrators.
“The UK and overseas operations of MF Global UK Limited have ceased trading and the joint special administrators are working with the regulatory authorities, clearing systems and other counterparties in relation to the orderly wind down of the trading operations,” Fleming added.
This is the first use of the new special administration regime for investment banks and the administrators will prioritise the return of client money and remaining assets (chiefly margined futures and options exchange transactions and repurchase agreements); timely engagement with the authorities, exchanges and clearing houses as well as winding up the company for the benefit of creditors.
MF Global UK employs 725 people, a great portion of which are facing redundancies.