Commodity Transfer from MF Global OKed
Commodity customers of MF Global Inc. will have their prayers answered as the U.S. Bankruptcy Judge Martin Glenn has approved the request by James Giddens, the Trustee for the liquidation of the failed company, to allow the transfer of certain segregated customer commodity positions.
MF Global UK recently entered the Special Administration Regime (SAR) after MF Global Holdings Limited and MF Global Finance USA Inc. filed for chapter 11 bankruptcy protection late last month. Special administrators Richard Fleming, Richard Heis and Mike Pink of KPMG LLP have been called in to MF Global UK.
Judge Glenn has inked the transfer of commodity positions from MF Global Inc. to one or more futures commission merchants, allowing the transfer of approximately 50,000 accounts, the substantial majority of which were cleared through the Chicago Mercantile Exchange (CME).
The account transfers meet the Trustee’s Securities Investor Protection Act (SIPA) mandate to protect customers.
The Trustee, in cooperation with the Securities Investor Protection Corporation (SIPC) and the Commodity Futures Trading Commission (CFTC), determined that account transfers will contribute to the prompt satisfaction of commodity customer claims and the orderly liquidation of MF Global Inc.
The result of the order, achieved in close cooperation with CFTC chairman Gary Gensler and his staff, allows a substantial portion of all the existing commodity accounts at MF Global Inc. to be transferred. Additionally, these transfers will unfreeze commodity positions with a notional value of $100 billion.
“The ability to transfer thousands of accounts is a significant first step in protecting customer property and is the result of leadership from CFTC and SIPC,” said Giddens, a partner at Hughes Hubbard & Reed LLP in New York.