Hector Sants, the U.K.’s Financial Services Authority chief, said the agency would seek ways to ensure clients of failed investment firms get their assets back faster in the wake of the failure of MF Global Holdings Ltd.
The FSA is working on rules to ensure “the information and records required by an insolvency practitioner to return a client’s assets is readily available” in a letter last month to Andrew Tyrie, a Conservative lawmaker.
“Under the current legislative and regulatory landscape, client assets distribution will remain something that occurs over the course of months, rather than weeks, even in the most orderly of firm failures,” Sants said in the letter, dated March 19, on the U.K. parliament’s website.
About $1 billion of MF Global (MFGLQ)’s U.K. client money remains locked away in other financial institutions after the brokerage’s collapse, administrators at KPMG LLP said last month. The figures relate to unsegregated client accounts, which MF Global mixed with its own funds and have been difficult for the administrators to recover.
MF Global was the fifth-largest financial company to file for bankruptcy when it sought protection on Oct. 31 after getting margin calls on its bets on European sovereign debt.
To contact the reporter on this story: Kit Chellel in London at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com