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FSCS pays out £130k to MF Global UK customers

The Financial Services Compensation Scheme has so far paid out over £130,000 in compensation to customers of MF Global UK.

The FSCS has sent compensation claim forms to over 10,000 customers, including over 4,000 investors with individual accounts.

Investment advisers have been hit with a £60m interim levy for 2011/12, with MF Global claims alone expected to account for almost £27m.

The FSCS has told MF Global customers it cannot process claims until investors have agreed their balances with MF Global UK special administrator KPMG.

KPMG will then provide information on agreed balances to the FSCS, to allow it to assess the claims and make payments to eligible claimants.

The FSCS is making all compensation payments in British pounds, converting any US dollar balances provided by KPMG as at October 31 last year when the firm collapsed.  All payments are being made by cheque.

In some cases where positions were liquidated after October 31, customers will receive two balances from KPMG to agree.

If customers agree to both balances, interim distributions made by KPMG and payment by the FSCS will be based on the lower of these two balances.

The FSCS says: “We will provide any further updates on our website when we are in a position to do so.”

MF Global UK, the UK subsidiary of the failed investment brokerage, was placed into special administration in October. New York-based MF Global collapsed on October 31 after a $6.3bn exposure to eurozone debt failed to pay off.

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