MF Global HK slapped with restriction notice

The notice is issued under sections 204, 205 and 206 of the Securities and Futures Ordinance - but what does it entail?

The Stock Exchange of Hong Kong (SEHK), Hong Kong Futures Exchange (HKFE) and the clearing houses of Hong Kong Exchanges and Clearing Limited (HKEx) were informed that the Securities and Futures Commission (SFC) issued a restriction notice on MF Global Hong Kong Limited (MFG-HK) today (Tuesday) under sections 204, 205 and 206 of the Securities and Futures Ordinance.

Under the restriction notice, MFG-HK is permitted to settle outstanding securities transactions in HKEx’s Central Clearing and Settlement System and to close out or transfer in an orderly manner its clients’ outstanding futures and options positions in the HKFE Clearing Corporation in accordance with the clients’ instructions and consent by the close of business in Hong Kong on 4 November 2011.

MFG-HK has been winding down its outstanding positions and has been meeting its financial obligations to HKEx’s clearing houses.

Earlier today, MFG-HK requested a trading suspension in HKEx’s securities and stock options markets. As a consequence, HKEx promptly suspended MFG-HK’s right to access the securities market’s trading system and the stock options market’s trading system.

HKEx has been in close contact with the SFC and MFG-HK’s management.
HKEx will continue to monitor the developments regarding MFG and MFG-HK and assess the updated information and circumstances to determine what additional action, if any, is required.