MF Global collapse hits Patsystems

MF Global collapse hits Patsystems

Shares in UK screen-dealing software house Patsystems fell over 10% yesterday on news of the collapse of MF Global, a major customer accounting for recurring revenue of around £3 million.

US brokerage MF Global filed for bankruptcy protection in New York yesterday after revealing $6.3 billion in exposure to European sovereign debt.

In a brief statement reacting to the news, Patsystems confirmed that MF Global is an "important customer" bringing in around £3 million in recurring revenues and that it currently owes the vendor £300,000.

The development is a major blow to Patsystems, which only last month was forced to issue a profits warning as sales to emerging exchanges were hit by economic and financial turmoil.

That sent shares in the firm plummeting by over 30% and yesterday's events caused a further fall. Although there was a slight recovery this morning, with shares up by 1.2%, to 10.5 pence a share, the vendor is still trading well below its year high of 29.25 pence a share.

MF Global was forced to file for bankruptcy after a deal to sell large parts of the business to Interactive Brokers fell through. According to the New York Times, citing people familiar with talks, a deal was all but signed on Sunday evening for Interactive Brokers to take on MF Global's futures and securities customers and to prop up other units, including its British affiliate.

However, in the middle of the night Interactive Brokers examined MF Global customer accounts and found some client money was missing. The rescue package collapsed and regulators are now examining whether the struggling broker diverted its customers' money to support its own trades in a bid to stave off collapse.

Other vendors with technology exposure to MF Global include Ffastfill, Thomson Reuters, and Fidessa. In a trading update, Fidessa says that it "does not anticipate that the situation at MF Global will have any material impact on the results for the year".

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