CME Group Finds Mix-Up In Transfer Of Some MF Global Accounts In Canada

CME Group Inc. (CME) admitted Sunday that there had been more problems with the mass transfer of MF Global Holdings Ltd. (MFGLQ) customer accounts, forcing it to reverse the shift of some Canadian clients' position and collateral completed on Friday.

The exchange operator said some Canadian account information had become mixed with U.S. client data. CME said both sets were provided by MF Global.

"Such transfers of Canadian accounts were not authorized by Canadian regulators nor the Trustee of MF Global Canada," CME said in a client note. "As a result, CME Clearing is working under the Trustee's direction to transfer these accounts back to MF Global Canada prior to the market opening tomorrow, November 7, 2011."

CME said position transfers for the affected accounts had been processed to Vision Financial Markets LLC, a U.S.-based clearing firm.

Chicago-based CME on Saturday took more steps to ease the mass transfer of customer accounts previously overseen by MF Global by relaxing margin requirements.

CME said on Friday that they completed the transfer of all MF Global-related customers at its exchanges--though not all of their funds--to other firms.

However, the moves led to some confusion as transferred clients faced the prospect of tougher margin calls with their new clearing firms that could have forced them to liquidate positions.

"In light of the issues customers transferring out of MF Global are facing, while still maintaining appropriate risk management protections for the market, CME Clearing is setting the 'initial' margin upcharge at zero," the company said in a client notice Saturday.

CME said the move would "decrease the size of any margin calls resulting from the bulk transfer of MF Global customers to new clearing members, not to increase them."

The exchange operator apologized in the note for any confusion created by the initial transfer process.

-By Doug Cameron, Dow Jones Newswires; 312 750 4135

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