Anxious investors swarm Singapore office
- The Singapore operations of a Wall Street brokerage that has collapsed as a result of the European debt crisis are to be wound down.
- Accountancy giant KPMG has been appointed as the provisional liquidator to oversee the process, the firm MF Global Singapore said last night.
- Its parent, MF Global, filed for bankdruptcy protection in New York on Monday with debts of US$39.7billion (S$49 billion) – the biggest United States casualty of Europe’s crisis.
- According to the MF Global website, the operation here was the fourth largest derivatives trader on the Singapore Exchange, in terms of trading volume in the year ened Mar 2011.
- It employed between 100 and 200 staff, which makes it an average-sized brokerage in Singapore.
- MF Global Singapore had been operating here since 1996
- Customers could trade in over-the-counter markets in foreign exchange, precious metals and equity derivatives including Contracts for Difference (CFDs). CPDs are a type of financial instrument that allows an investor to bet on the movement of an asset, whether a stock , currency or commodity, without actually having to own the asset itself.
- In the statement, MF Global Singapore said: “The provisional liquidation is intended to safeguard the interests of the customers of the company and ensure that the company does not engage in new trades, as well as the equal treatment of all creditors of the company.”
- Winding down of the firm will not affect customer funds already placed in segregated accounts.
- The troubles at the firm have hit customers of at least one other brokerage in Singapore.
- Kim Eng Securities revealed yesterday that MF Global Singapore was its CFD counterparty. This means that the CFDs Kim Eng offered its customers came from MF Global Singapore and were traded using the US firm’s trading platform.
- When MF Global Singapore halted all trading in CFDs yesterday, it meant Kim Eng and its CFD customers were also unable to access their CFD portfolios and excute trades or close out exisiting positions.
- “KE CFD is, however, confident that it will be able to provide alternative market access for our clients tomorrow to unwind their open positions,” the brokerage said in a statement.
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