MF Global UK enters Special Administration Regime

MF Global UK Limited yesterday entered into the Special Administration Regime, a new administration procedure for investment banks which was introduced in February this year, following the collapse of Lehman Brothers. This is the first time that the new procedure, set out in The Investment Bank Special Administration Regulations 2011 (the “Regulations”), has been used.

An administrator appointed under the Regulations has three objectives, namely:

  • returning client property as soon as reasonably practicable;
  • co-operating with the markets in resolving failed trades; and
  • either rescuing the firm as a going concern or winding it up in the best interests of the creditors.

The administrator has flexibility as to which of these objectives to prioritise, but the FSA does have the power, having consulted with the Treasury and the Bank of England, to direct the administrator to prioritise one or more of these objectives, if doing so is necessary to maintain public confidence in the stability of the UK financial markets.

For our briefing which provides an overview of the Regulations, please click here.

For further information, please speak to your usual Linklaters contact.