MF Global administrator vows to close broker's positions within days

More than 700 staff in London are told they will be paid this month – but their jobs are still at risk

The UK administrators of the collapsed brokerage MF Global expect to have closed out most of its trading positions by the middle of next week, though decisions about what to do with its 725-strong London staff will be put off until after that.

The task of unpicking MF Global's British operations has been made easier by recently introduced changes to bankruptcy procedures for financial firms, said Richard Fleming, one of the three accountants from KPMG who were appointed administrators when the company collapsed on Monday.

But a team of 30 staff has been assigned to smooth relations with financial exchanges, many of which locked out MF Global employees and froze positions when the US parent filed for Chapter 11 bankruptcy in New York. Persuading exchanges and clearing-houses to allow MF Global to complete its trading is vital if money is to be quickly returned to clients.

"We are barely one day in and we are right in the middle of the storm," Mr Fleming said. "But the vast majority of positions will be closed very quickly when we get systems working, probably by the end of this week or early next week."

MF Global's historic UK arm had about $20bn (£12bn) of assets when it went under, capsized by an extraordinary $6.3bn bet on eurozone sovereign debt that was placed with the company's own money from headquarters in New York. The company has its origins in a sugar-trading firm founded more than 200 years ago in London by James Man and it was only spun out of FTSE 100 constituent Man Group in 2007.

The London employees have been told they will receive their salaries this month and no one has been laid off so far. Mr Fleming said "we will need a good number of people for a good time to come", although redundancies are inevitable. MF Global is the first financial firm to be put into a Special Administration Regime, which orders administrators to prioritise the return of client assets and is designed to avoid a repeat of the fall-out from Lehman Brothers, whose collapse froze large parts of the financial system.

The administrators were due to have their first conference call with their US counterparts last night to examine the deep trading relationships between the transatlantic divisions. So far, there have been no indications of any disputes between the two about the ownership of assets, which bedevilled the wind-up of Lehman Brothers in 2008. Mr Fleming is also not expecting the UK arm to be affected by legal problems in the US, where the company has been accused of illegally dipping into client funds during its dying days.

MF Global's lawyers have said that management was not aware of any shortfall in client accounts and the trustee overseeing the bankruptcy hopes money will return to the US accounts as trading positions are closed. Some $600m is unaccounted for, according to some reports.

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