US-based broker MF Global Holdings has filed for bankruptcy, and its British subsidiary, MF Global UK Limited, has entered the Financial Services Authoritys Special Administration Regime (SAR). It is the first time the SAR, established earlier this year as a method of swiftly returning client assets in the event of the collapse of a broker, has been initiated.
Richard Fleming, Richard Heis and Mike Pink of KPMG have been appointed as joint special administrators. The SAR ensures client assets are returned; ensures timely engagement with market infrastructure bodies and authorities; and either rescues the firm or winds it up in the best interests of its creditors, according to the FSA.
Fleming told the Wall Street Journal the financial position of MF Global UK has significantly deteriorated recently due to the economic crisis in the Eurozone. He was quoted as saying it would not be viable for the UK subsidiary to operate on a standalone basis following the bankruptcy of its US parent.
Exchanges and clearing entities around the world have halted trades by the firm, which is active around the globe, the WSJ reports.
(CG)