CME Transfers Some MF Global Customer Business To Other Firms
November 04 2011 - 12:20PM
Dow Jones News
About 5,300 of MF Global Holdings Ltd. (MFGLQ) customer accounts
and more than $410 million in trading collateral were transferred
to other trade-clearing firms Thursday, according to exchange
operator CME Group Inc. (CME).
The mass shift of MF Global clients to rival clearinghouse
member firms continues Friday at CME and other U.S. derivatives
markets, according to a statement from CME.
The effort seeks to free up customers who had trading positions
frozen and margin money trapped by MF Global's collapse on Monday.
MF Global's bankruptcy filing also revealed a shortfall in client
funds held on deposit, estimated at about $633 million. The
discrepancy in client assets, which by law are to remain separate
from a clearing firm's own funds, has held up the process of
transferring MF Global clients elsewhere.
For this reason, only about 60% of the collateral posted by
floor traders and hedge funds and managed by MF Global is being
dispersed as part of the transfer, according to people familiar
with the matter.
"CME Clearing continues to hold MF Global proprietary and
customer collateral that will be distributed upon instructions from
the Trustee and the bankruptcy court," CME officials said in a
statement Friday.
Other clearing facilities serving markets run by
IntercontinentalExchange Inc. (ICE), NYSE Euronext (NYX), CBOE
Holdings Inc. (CBOE) and the Minneapolis Grain Exchange are
pursuing similar transfer efforts, according to CME, as well as the
Options Clearing Corp., which handles trading on all U.S.
stock-options exchanges.
-By Jacob Bunge, Dow Jones Newswires; 312-750-4117;
jacob.bunge@dowjones.com
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