MF Global: non-US clients caught in cross-border collateral trap

Omnibus structure meant clearing clients of MF Global outside the US were asked to double up on collateral payments. Use of the structure for OTC markets is now in doubt

Mouse thinking of stealing some cheese from a mousetrap

Non-US futures clearing clients of MF Global found their collateral trapped in cross-border limbo last month following the firm's collapse, and were asked to stump up fresh assets if they wanted to port their cleared business to another firm – not all were able to do so, and some had to liquidate their positions as a result, dealers say.

"There certainly were clients who didn't have the margin to avoid the liquidation of their positions, and we didn't entertain the prospect of allowing positions

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