FSCS begins claims process for MF Global UK
The Financial Services Compensation Scheme has begun the process of sending out claim forms to private investors of MF Global UK.
Private customers of MF Global UK will receive a claim form for compensation from the FSCS within the next few days.
The FSCS expects to send out application forms for compensation relating to corporate accounts by the end of February.
MF Global UK, the UK subsidiary of the failed investment brokerage, was placed into special administration in October. A list acquired by Money Marketing through a freedom of information request shows that MF Global UK is in the investment intermediation FSCS sub-class.
New York-based MF Global collapsed on October 31 after a $6.3bn exposure to eurozone debt failed to pay off.
Reports have suggested that MF Global used a legal loophole to place US business with its UK subsidiary. The FSCS has refused to rule out whether this means IFAs will have to pay the cost of compensating US investors.
The FSCS has been working with MF Global UK administrators KPMG to compile customers’ data ahead of sending out the application forms.
FSCS chief executive Mark Neale says: “Although we will not be able to complete claims until KPMG is able to confirm account balances, we want to assure customers of MF Global that we are working with KPMG to ensure eligible claimants are compensated as quickly as possible.”
The FSCS can pay up to £50,000 in compensation per person in relation to investment claims against MF Global UK.
Last month the FSCS warned compensation costs for MF Global and Arch cru could go above the £100m adviser sub-class limit and trigger a cross-subsidy for fund managers. The sub-class has so far paid out £30m this FSCS financial year.