Private investors in Singapore concerned about their investments rallied outside MF Global’s local offices in the country but ended up distressed and empty-handed on Wednesday after they were informed that their dealing positions were closed and their funds were presently frozen.
A sizable crowd of retail investors waited at the MF Global office for hours in an attempt to recover their funds, but all they were handed was an application form to fill in after being alerted that no money would be distributed until liquidators have wound down the now bankrupt USA brokerage.
One investor, Andre Chia, a 32-year-old pilot said that he’s afraid he might not get his money back. ‘I’m waiting for the liquidation, MAS (Monetary Authority of Singapore), maybe I’ll end up at the Speakers’ Corner,’ he added, referring to the singular place in Singapore where protesters can gather to voice their laments without a permit.
In the aftermath of the collapse of Lehman Brothers in 2008, hundreds of locals met at Speakers’ Corner to protest their losses from mini-bonds linked to the failed USA bank.
Liquidators from KPMG have tried to assure MF Global clients in Singapore that they are working to make sure that all monies in client accounts are returned back to the respective owners. KPMG said that they need to verify records in respect to clients’ segregated accounts, including verification of customers’ ownership to the monies and assets in such accounts before progressing with dispursement.
However a number of investors were upset that they were closed out of trades at a loss, with no possibility to wait for the market to reverse.
‘I feel uneasy, I don’t know how much I will lose. If I have to cut losses, I have to know how much I will lose,’ lamented 57-year-old John Wong, who had S$8,000 ($6,259) deposited in an account with the brokerage company.
About 20 investors visited the office on Wednesday afternoon, while local media reported that at least 60 people converged on the premises that morning. But the concerns were not just limited to clients who dealt directly with MF Global in Singapore, where retail trading is an increasingly popular activity. A number of other brokerage companies utilised the USA company as a counterparty to their CFD products and essentially they’ve been brought to a halt.
AMFraser stated on its web site that from Nov 1, MF Global stopped all trading in CFDs. ‘As such, we have no market access and clients will not be able to close out CFD positions for the time being,’ it wrote in a note to clients. Kim Eng Securities, a unit of Malaysia’s Maybank, and the Singapore unit of Malaysia’s CIMB likewise had to freeze access to their CFD products, although Kim Eng said on its web site on Wednesday that it had restored limited access to allow trades to be closed while CIMB told clients to contact them.
The Monetary Authority of Singapore stated in a report that it has been informed that there were about 1,000 active CFD accounts with MF Global Singapore. It also said that it will work with MF Global Singapore and the liquidators to achieve an ‘equitable treatment of all stakeholders’. Meanwhile Singapore’s central bank said that it would prioritise safeguarding the interests of private investors who had dealings with the Singapore division of collapsed brokerage MF Global. The Monetary Authority of Singapore added that client monies held with MF Global’s Singapore division were safe, as Singapore law obliged the unit to segregate client assets. But it acknowledged the funds could be tied for a period of time as regulators and insolvency auditors sort out the broker’s finances.
