Bulk of MF Global positions in Europe still open
By Melanie Burton and Jane Lee
LONDON/KUALA LUMPUR (Reuters) - Nearly two-thirds of positions from the UK unit of MF Global were still open on Monday, a week after it filed for bankruptcy protection, sparking frustration about delays in moving business to new brokers and dampening volumes in metals trading.
U.S. exchanges, meanwhile, have cut margin requirements on some accounts from MF Global to limit the fallout on futures markets from the collapse of the broker.
UK administrators KPMG said 954,000 positions were open out of the 1.6 million positions in place when MF Global Holdings Ltd filed for bankruptcy protection on October 31.
Traders on the London Metal Exchange said turnover was thinner than usual partly due to delays in transferring MF Global positions to new brokers.
"Nothing has happened yet. We are waiting for it every hour. Therefore customers are reluctant to put on any more new trades before they know what has happened with the old ones," a metals trader said.
An oil broker in London said his firm had sent transfers to ICE at the beginning of last week but was still waiting.
"They are still stuck, and no transfers are taking place. Our clients are waiting. It's very confusing. We don't know if the positions will be at the original prices or not."
Tamas Varga at brokers PVM Oil Associates in London called for changes in how client positions are handled in a bankruptcy and also in how regulators treat firms that move into risky speculative trading. Continued...