LONDON/KUALA LUMPUR (Reuters) - Nearly two-thirds of positions from the UK unit of MF Global were still open on Monday, a week after it filed for bankruptcy protection, sparking frustration about delays in moving business to new brokers and dampening volumes in metals trading.
U.S. exchanges, meanwhile, have cut margin requirements on some accounts from MF Global to limit the fallout on futures markets from the collapse of the broker.
UK administrators KPMG said 954,000 positions were open out of the 1.6 million positions in place when MF Global Holdings Ltd filed for bankruptcy protection on October 31.
The collapse of MF Global -- the largest U.S. firm to fail since Lehman Brothers in 2008 -- has hit commodities markets across the globe.
Traders on the London Metal Exchange said turnover was thinner than usual on Monday partly due to delays in transferring MF Global positions to new brokers.
"Nothing has happened yet. We are waiting for it every hour. Therefore customers are reluctant to put on any more new trades before they know what has happened with the old ones," a metals trader said.
"They are still stuck, and no transfers are taking place. Our clients are waiting. It's very confusing. We don't know if the positions will be at the original prices or not."
ICE, meanwhile, said it had canceled plans to auction off remaining contracts held by MF Global in the UK.
One metals trader said some of the smaller MF Global clients may have difficulty finding a new broker.
"Brokers right now are a bit nervous to lend to companies that have small balance sheets. A lot of MF Global clients were like that ... perhaps new brokers think what's the point of taking on more risk," said Jaspar Crawley, a broker at Triland Metals in London.
Tamas Varga at brokers PVM Oil Associates in London called for changes in the handling of client positions in bankruptcy and also in how regulators treat firms that move into risky speculative trading.
"There. . . seems to be a lot of confusion about the way the exchanges and their associated clearing houses have handled and are continuing to handle the bankruptcy and account holders' positions," he said.
"There should be a distinct separation and understanding amongst all involved in trading -- and clear thinking about the differences in regulating those who take on proprietary risk in the course of their business and those who don't."
IN TALKS ON SALES
UK administrators said they were in talks about selling parts of the MF Global business in the UK.
"The ... operation is not saleable as a total entity, but there are numerous discussions going on with various potential acquirers of part of the business," KPMG's Richard Heis said in an interview, declining to give further details.
KPMG said the $633 million in missing client assets -- whose disappearance derailed MF Global's efforts last week to quickly sell a variety of assets -- were unlikely to affect the winding down of the UK business.