Go to the Globe and Mail homepage

Jump to main navigationJump to main content

A woman leaves the office complex where MF Global Holdings Ltd have an office on 52nd Street in midtown Manhattan October 29, 2011. (ANDREW KELLY/Reuters)
A woman leaves the office complex where MF Global Holdings Ltd have an office on 52nd Street in midtown Manhattan October 29, 2011. (ANDREW KELLY/Reuters)

Trading

Uncertainty continues for MF Global Canada clients Add to ...

The Canadian Investor Protection Fund said MF Global Canada Co.’s bankruptcy affects “about $400-million” of client net equity – but it hasn’t yet established whether the commodities and currency brokerage house has a financial shortfall that would require the fund to make up the difference for investors.

More related to this story

“Everybody’s working as hard as they can,” to resolve the matter and re-establish clients’ access to their accounts, said Rozanne Reszel, president and chief executive officer of CIPF. “We’re not talking weeks – we’re talking days.”

MF Global Canada’s clients have been frozen out of their accounts for a week, since Canada’s regulator, the Investment Industry Regulatory Organization of Canada (IIROC), suspended the firm’s trading privileges following the bankruptcy filing of its U.S. parent, MF Global Holdings Ltd. The Canadian company found itself below its capital requirements, as a substantial portion of client funds were tied up in an omnibus trading account with a U.S. bank and couldn’t be released due to the U.S. parent’s bankruptcy process.

Last Friday, CIPF obtained a court bankruptcy order for MF Global Canada – a move that allowed the appointment of a trustee (KPMG Inc.) to assess what assets MF Global Canada had on its books that could be returned to its customers, and what portion of it was accessible to Canadian authorities.

“Nothing has come to our attention to make us think anything [in client accounts]is not accounted for. The question is, is it accessible,” Ms. Reszel said.

She said that if, due to accessibility issues, MF Global Canada is short of funds to fully cover client net equity, CIPF would make up the difference for each client account, up to a maximum of $1-million. CIPF would then be reimbursed by the trustee once the MF Global Canada funds were freed up.

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories