"Every Former MF Global Account Faces A Margin Call" - Non-CME MF Global Transfers Get The Monday Blues

Tyler Durden's picture

If you are a former MF Global account and you have your account transferred over to RJ O'Brien, or many others, you will have no choice but to fork out a bunch of cash to keep positions on, according to a statement awaiting all such accounts on the RJO website, or else be next in line for broad liquidations. To wit: "Former MF Global customers transferred to R.J. O’Brien were delivered with approximately 75% of the maintenance margin requirement related to their accounts. As a result, every former MF Global account faces a margin call. No excess equity was transferred." Naturally the next question is "Why are we not getting 100% of our MMR (Maintenance Margin) from the exchange?" And the answer: "This is an agreement between the trustee and CME Group. Please visit www.mfglobaltrustee.com for further information or questions." So, in addition to lowering initial margin for everyone, not just MF Global clients, did the CME iron out preferential terms over other exchanges and get larger equity of the account transfer than most? Because somehow we doubt that RJ O'Brien is the only exchange that is greeting their clients with this particular notice.

Full FAQ for All R.J. O'Brien customers:

R.J. O’Brien Margin Policy Update for Former MF Global Customers

Former MF Global customers transferred to R.J. O’Brien were
delivered with approximately 75% of the maintenance margin requirement
related to their accounts. As a result, every former MF Global account faces a margin call. No excess equity was transferred.

All former MF Global customers must wire R.J. O’Brien additional
monies to bring their account above its initial margin requirement or
liquidate their current trading positions.

If the account did not contain a trading position, former MF
Global customers must wire or mail R.J. O’Brien funds to initiate
trading as no excess equity was transferred.

All Margin Calls Must Be Met By Wire

Former MF Global customers will need to begin initiating payment
to meet margin calls immediately. Customers will need to wire monies
to the following account:

Harris Bank, Chicago IL
ABA #071-000-288
R.J. O’Brien Cust Seg Funds
#368-015-2
FFC: Customer Account Name
FFC: Customer Account Number

If funds are not received by the close of
business (4:00 PM CST) Monday, November 7, 2011, your account will be
subject to liquidation.

After your account has been properly margined, the regular R.J. O’Brien margin policy will be in effect.

Who is now clearing my account?

  • Individual trading and some other accounts formerly cleared by MF Global are now cleared by R.J. O’Brien.

When will I be able to trade my account?

  • We anticipate you will be able to trade at the regular Sunday
    evening market opening(s) for the trade date of Monday, November 7,
    2011.

How do I log in? Will I see my positions?

  • Log in to the MF Global.com page as you did before, using your
    current account number and preferred platform. Your positions that were
    transferred will be accessible via your platform.

What if there are discrepancies with my account balance or transferred positions?

  • Contact your trade desk or broker for assistance.

Has my account number changed?

  • Yes. See the list below to determine your new number. For example, if you account number started with 550, it’s now U50.

    Z = will preface any offices that start with a blank
    Y = 1
    X = 2
    W = 3
    V = 4
    U = 5
    T = 6
    S =7
    H = 8
    Q =9

What numbers do I call or night or day order entry?

  • Any phone numbers and personnel you currently use are still active.

What exactly moved over from my position at MF Global?

  • Open positions on U.S. futures exchanges were transferred to RJO.
    These include positions on CME Group (including CME, CBOT and NYMEX),
    ICE Futures U.S., Kansas City Board of Trade, Minneapolis Grain
    Exchange, NYSE Liffe U.S. and CBOE Futures Exchange (CFE).
  • All account types, including individual, IRA, trust, joint, corporate, etc. were transferred.

Will positions on international exchanges move to RJO?

What If I did not have positions on, only cash?

  • If you only had cash in your account, this equity did not transfer and resides with the trustee. Please visit www.mfglobaltrustee.com
    for information on how to obtain these funds. However, you do have an
    account on record with R.J. O’Brien and can trade after funding it. See
    funding instructions below or at www.rjobrien.com/mfglobal.

Can I trade open outcry markets?

  • Call your trade desk or broker for assistance.

Where do I get my quotes and charts?

Who should I contact about receiving the cash in my account that did not transfer?

If I go on margin call because my entire account balance did not transfer, what do I do?

  • You will be required to properly fund your account to meet margin
    requirements, or you will need to liquidate your positions to increase
    the equity in your account. R.J. O’Brien’s margin policy is available at
    www.rjobrien.com.

Why are we not getting 100% of our MMR (Maintenance Margin) from the exchange?

  • This is an agreement between the trustee and CME Group. Please visit www.mfglobaltrustee.com for further information or questions.

What happens if I had an account at R.J. O’Brien and MF Global?

  • You will have two separate accounts.

Will my commission structure change?

  • We are committed to maintaining the current structure. Your
    statement may contain a different rate, but it will be subsequently
    adjusted.

How do I access my statement?

  • If you traditionally receive your statement via email or mail, you
    will continue to receive it. If you receive it via your platform, call
    your trade desk for assistance.

I want to close my account and/or transfer to another broker.

  • To close your account, see wire instructions below. To transfer to
    another broker, contact that broker, who will facilitate the process.

I have a broker-assisted account. Can I still trade with my current market strategist?

  • Yes.

What if I have a deliverable position?

  • At this time, the clearing houses have not yet made a decision on the delivery process. Please contact your broker or www.rjobrien.com for further details.

How long do I have to meet my margin requirement?

  • As soon as possible; call your trade desk or broker for assistance.

How do I send money to my RJO account?

  • Please send checks by express mail to:
  • RJO Treasury Department
    222 South Riverside Plaza
    Suite 900
    Chicago, IL, 60606

  • We will also accept wire transfers. Please use the following wire instructions:
  • United States Dollar-Customer Segregated, Fed wire instructions:
    Harris Bank, Chicago IL
    ABA #071-000-288
    R.J. O’Brien Cust Seg Funds
    #368-015-2
    FFC: Customer Account Name
    FFC: Customer Account Number

What are the wire cut-off times?

  • Inbound or outbound is 11:00 a.m. CT.

Can you accept checks made out to MF Global?

  • No. Please make checks payable to R.J. O’Brien.

Do you accept ACH deposits from clients?

  • We will be able to accept ACH’s after the first of the year.
  • ACH set-up forms will be made available in the coming days.

I’m a Schwab at MF Global client. Can I still do an internal transfer between my futures and equity Schwab account?

  • No, this service is not available at this time.

Who do I contact with questions about my Schwab at MF Global account?

  • Contact your usual Schwab at MF Global representative and/or trade desk.