FSCS ‘close’ to paying first MF Global claims

The Financial Services Compensation Scheme (FSCS) says it is close to making its first compensation payments to customers of MF Global UK.

Over the last month the FSCS has sent compensation claim forms to over 10,000 customers, including over 4,000 investors with individual accounts.

The FSCS says it is now finalising its payout process.

Claimants have to agree their balances with special administrators KPMG before the FSCS can process claims.

The FSCS says: “Where the balances may [be] subject to future review, the FSCS expects to follow the administrator’s approach and adopt the lower of the alternatives at this stage. (article continues below)

“The FSCS will continue to keep customers of MF Global UK informed about its progress by providing a further update on its website when it is in a position to do so.”

In its plan and budget for 2012-13, published last month, the FSCS warned it may need to raise a £40m interim levy on investment intermediaries before the end of March, including expected claims related to MF Global UK.

Money Marketing, Fundweb’s sister publication, reported in December that MF Global may have placed US business with its UK subsidiary. It is as yet unclear whether UK advisers could end up covering the cost of compensating US investors.

New York-based investment brokerage MF Global collapsed on October 31 last year after a $6.3 billion (£3.9 billion) exposure to eurozone debt failed to pay off. MF Global UK was placed into special administration in October.