CME Freezes Final Fund Transfer For Some MF Global Clients

Many former MF Global Holdings Ltd. (MFGLQ) clients face a further delay in securing their funds and collateral after CME Group Inc. (CME) said it had frozen access them until after the close of business on Nov. 8.

The Chicago-based exchange operator oversaw the mass transfer of client accounts from the failed brokerage to new clearing partners, a process that was due to have been completed on Nov. 4.

But in a client notice late Sunday, CME said it was checking whether "the correct amount of collateral was allocated to each of the customers involved in the bulk transfer of positions."

CME said in a client notice it had directed the firms that had taken over the MF Global business to delay distributing the transferred collateral and funds from liquidated positions until the checks had been completed.

The company didn't expand in the notice as to whether any mistakes had been made in the original calculation.

The delay is the latest hitch in the transfer of thousands of client accounts hit by MF Global's bankruptcy filing.

CME also admitted Sunday that it had been required to reverse the shift of some Canadian clients' position and collateral completed on Friday. Some Canadian account information had become mixed with U.S. client data. CME said both sets were provided by MF Global.

On Saturday, CME 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.

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 and Jacob Bunge, Dow Jones Newswires; 312 750 4135

CME (NASDAQ:CME)
Historical Stock Chart
From May 2024 to Jun 2024