MF Global to exit US Futures Exchange

MF Global to exit US Futures Exchange

MF Global is to write off its 48% stake in ailing US Futures Exchange, spurring the mart to a last ditch effort to find a buyer for the business before the year end.

Absent a sale of USFE, MF Global estimates that it will take a non-cash impairment charge of $9 million to $11 million in Q3, and a cash charge of $3 million to $5 million, net of tax. USFE represented approximately $7 million of expense to MF Global annually, net of tax.

Bernard Dan, chief executive officer, MF Global, comments: "The decision to exit the business and take the impairment charge is a reflection of our commitment to appropriately allocate our human and financial capital to those areas that will enhance operating margins and deliver long-term shareholder value."

In a related announcement, the USFE has stated its intention to seek a strategic sale of its operations with the objective of reaching a resolution by December 31, 2008.

Originally established as a direct competitor to the Chicago Mercantile Exchange by Eurex, the business was resuscitated in 2006 by a capital infusion from Man Group, with a new focus on providing products for hedge funds and retail investors.

Earlier this month, ELX - a new challenger to the CME established by a consortium of bank and three Chicago trading firms - filed with federal regulators for approval to operate as a futures exchange.

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