MF Global: US Update as of November 9, 2011 - SIPC Trustee Announces Transfer of Additional Commodity Accounts

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On November 7, 2011, the SIPC Trustee (the "Trustee") announced that MF Global Inc. ("MFGI") commodity customer accounts that had not yet been transferred by the Trustee can now be transferred provided that the account holder finds a Futures Commission Merchant (an "FCM") willing to accept a transfer of the positions in the account without collateral. All account transfers must be completed by 5:00 p.m. EST Friday, November 11, 2011, at which time the process of an orderly liquidation of non-transferred accounts will begin. In order to protect their transferred positions, the Trustee advised MFGI customers to consider posting collateral if requested by the transferee FCM. Alternatively, MFGI customers can request that their accounts be liquidated.

The Trustee noted that he can only do bulk transfers of commodity accounts. However, if an individual's account has not been transferred as part of the bulk transfer, that account can be transferred if the individual finds an FCM and transfers the account without collateral.

The Trustee further confirmed that approximately 400 active security accounts have been identified and the Trustee is currently attempting to find brokers where those accounts can be bulk transferred back to customers. To the extent that accounts are not transferred, the Trustee will be establishing a claims process, which will be subject to bankruptcy court approval, for the customers and creditors of MFGI.

Please see full alert below for more information.

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Reed Smith on:

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