A court ruling on the way client money calculations are worked out could see investors caught up in MF Global's collapse lose $27.9 million.
In a judgement handed down int he High Court, Mr Justice David Richards confirmed Financial Services Authority rules around the distribution of client money on a regulated firm's insolvency requite administrators to value open positions as at the date of administration, rather the date the open position is closed.
The court heard arguments from Schneider Trading Associates on behalf of clients of MF Global UK, who stood to gain an estimated $27.9 million if trades they put on and were open when the firm entered administration were valued at the date they were closed out.
But while Justice Richards acknowledged there was 'no perfect system', he said the regulator had used the same method applied to daily reconciliations of client money, for reasons that were 'understandable' and in the interests of consistency and speed.
Justice Richards ruled: 'While some claimants will, inevitably, lose out, the benefits of this decision overall in terms of the certainty and simplicity it offers administrators and liquidators are significant.'