IN THE HIGH COURT OF JUSTICE No 9527 of 2011 IN THE MATTER OF MF GLOBAL UK LIMITED (IN SPECIAL ADMINISTRATION) AND

Transcription

1 IN THE HIGH COURT OF JUSTICE No 9527 of 2011 CHANCERY DIVISION COMPANIES COURT IN THE MATTER OF MF GLOBAL UK LIMITED (IN SPECIAL ADMINISTRATION) AND IN THE MATTER OF THE INVESTMENT BANK SPECIAL ADMINISTRATION REGULATIONS 2011 DISTRIBUTION PLAN DATED 29 JUNE 2012 (AS MODIFIED ON 19 JULY 2012) PART II

2 TABLE OF CONTENTS TABLE OF CONTENTS DEFINITIONS INTERPRETATION APPLICATION AND EFFECTIVENESS UNENCUMBERED CLIENT ASSETS ENCUMBERED CLIENT ASSETS POTENTIAL CLAIMANTS ALLEGED CLIENT ASSETS CLIENT ASSETS NOT UNDER THE CONTROL OF THE ADMINISTRATORS SUSPENDED, DELISTED OR UNLISTED SECURITIES CORPORATE ACTIONS AND MATURED CLIENT ASSETS SHORTFALL IN CLIENT ASSETS RETAINED CLIENT ASSETS COSTS OF RETURNING CLIENT ASSETS SHARED COSTS SPECIFIC COSTS CLAIMANT S SHARE OF COSTS AND NOT-HELD CLIENT ASSETS CLAIMANT S SHARE OF COSTS AND ALLEGED CLIENT ASSETS REBATES ADMINISTRATORS DISCRETION NOT TO APPLY SHARED COSTS VALUATION OF CLIENT ASSET CLAIMS CLAIMANT OPTIONS FORM DISTRIBUTION OPTIONS PAYMENT OF COSTS AND THE CLEARANCE OF ENCUMBRANCES PROOFS FOR CLAIMANT S SHARE OF COSTS CHALLENGE TO THE QUANTUM OF SHARED COSTS ADJUDICATION PROCESS IN RELATION TO SPECIFIC COSTS ONLY ADJUDICATOR ASSIGNMENTS OR TRANSFERS TREATMENT OF LATE CLAIMANTS AND AMENDMENTS TO DISTRIBUTION PLAN

3 30 NOTICE MODIFICATION ILLEGALITY AND SEVERANCE VARIATION GOVERNING LAW AND JURISDICTION SCHEDULES 1 UNENCUMBERED CLIENT ASSETS 2 ENCUMBERED CLIENT ASSETS 3 ALLEGED CLIENT ASSETS 4 DISPUTE FORM 5 CLAIMANT OPTIONS FORM 6 CURRENCY CODES 7 CURRICULUM VITAE OF ADJUDICATOR 8 DRAFT COURT ORDER 9 RETURN PROCEDURE 10 BAR DATE NOTICE 11 RELEVANT STATUTORY PROVISIONS 12 DELIVERY COSTS - 2 -

4 1 DEFINITIONS In this document: Accepted Client Asset Claim Adjudication Process means a Client Asset Claim that has been accepted by the Administrators following a review of the Company s books and records and any other relevant information available to the Administrators, or by order of the Court. means the adjudication process set out at Clause 26 (Adjudication Process in Relation to Specific Costs Only). Adjudicator shall have the meaning given to it in Clause Administration Date means 31 October Administrators Alleged Client Assets means Richard Fleming, Richard Heis and Michael Pink of KPMG LLP, 8 Salisbury Square, London EC4Y 8BB, and any administrator appointed to the Company within the Special Administration in addition to, or to replace one or more of, the foregoing appointees or their replacements. means assets, in respect of which, a Claimant has asserted a claim that those assets are Client Assets held for that Claimant, but which have been determined by the Administrators not to be Client Assets (whether because the assets were validly transferred to the Company on ATT terms or otherwise). Applicant shall have the meaning given to it in Clause ATT Bar Date Business Day means absolute title transfer in relation to an asset, such that title to that asset passes from the client to the Company. means 29 February 2012, and, in the case of MF Global Inc., 27 April means a day (other than a Saturday or Sunday or a public holiday) on which banks are open for business in London. Cash Option shall have the meaning given to it in Clause Claim Form Claimant Claimant Options Form Claimant s Share of Costs means the Claim Form (Client Money and Client Assets) which is available on the Website. means a person who has submitted a Client Asset Claim and, where appropriate, Potential Claimants and Late Claimants. means the form that shall be sent to Claimants following the Effective Date and which shall be substantially in the form set out in Schedule 5 (Claimant Options Form). means for each Claimant who has an Accepted Client Asset Claim, - 3 -

5 the aggregate of: (a) its rateable proportion of the Shared Costs; and (b) the Specific Costs attributable to it or the Client Assets held for it. Client Asset Claim Client Assets Client Code Client Omnibus Account Company Consultation Claimants means a claim for Client Assets identified in a Claim Form or submitted in accordance with Rules 139 or 140 that has been lodged with the Administrators. means assets which the Company has undertaken to hold for a client (whether or not on trust and whether or not the undertaking has been complied with), but does not include: (a) client assets received or held, or which should have been held, by the Company in accordance with rules made by virtue of section 139 of FSMA (client money), or, for the avoidance of doubt, (b) assets transferred to the Company on ATT terms under the Company s terms of business (or otherwise) (because the Company has not undertaken to hold such assets for a client). means the individual customer identifier which has been provided to the Claimant by the Administrators and which has been set out: (a) in Schedule 1 (Unencumbered Client Assets) at Column 1 (CIS ID) so that the Claimant can identify its Client Asset; (b) Schedule 2 (Encumbered Client Assets) at Column 1 (CIS ID) so that the Claimant can identify its Client Asset; and (c) Schedule 3 (Alleged Client Assets) at Column 1 (CIS ID) where available, otherwise at Column 2 (Claimant ID) so that the Claimant can identify the value of its Alleged Client Asset, in the Schedules to this Distribution Plan. means an account held by the Company, or another institution in the name of the Company, made up of multiple accounts of clients of the Company. means MF Global UK Limited (in special administration), a company incorporated in England and Wales (registered number ) whose registered office is at 5 Churchill Place, Canary Wharf, London E14 5HU acting by its Administrators. means the Claimants with whom the Administrators consulted with respect to the Distribution Plan. Contingency Value shall have the meaning given to it in Clause Court Creditors Committee means the High Court of Justice in England and Wales. means BB Energy (Gulf) DMCC, Unipec Singapore Pte. Limited, MF Global Inc, Peabody Coal Trade International Limited and AS KIT Finance Europe, who were elected by the creditors and clients of the Company at the initial creditors meeting of creditors and clients

6 CV shall have the meaning given to it in Clause 5.5. Dispute Dispute Form shall have the meaning given to it in Clause 26.1 (Adjudication Process). means the form which shall be substantially in the form set out at Schedule 4 (Dispute Form) to be submitted to the Administrators by a Claimant if that Claimant has wishes to raise a Dispute. Dispute Value shall have the meaning given to it in Clause Distribution means an Unencumbered Distribution, or Encumbered Distribution or a Further Encumbered Distribution as relevant. Distribution Option shall have the meaning given to it in Clause Distribution Plan means this distribution plan pursuant to Part 5 of the Rules in its present form or subject to any modifications, additions or conditions made or imposed by the Court under Rule 146(5) or by the Administrators under Rule 147(5). DV has the meaning given to it in Clause 5.5. Effective Date Electronically Held Securities Electronically Held Securities Return Procedure Encumbrance Encumbered Client Assets means the date and time at which the sealed order of the Court approving this Distribution Plan with or without modification has been received by the Administrators. means Securities held electronically in a dematerialised format, including Securities held either through a depository or a custodian. means the procedure for the return of Client Assets which are classified as Electronically Held Securities, as more particularly set out at Part A, Schedule 9 (Return Procedure). means, with respect to Encumbered Client Assets, any liabilities: (a) owed by the Claimant to the Company in respect of Financial Contracts; or (b) owed by the Claimant to a third party who asserts a Security Interest over the Encumbered Client Assets claimed by the Claimant. Client Assets over which a third party or the Company asserts a Security Interest. Encumbered Distribution shall have the meaning given to it in Clause 5.1. Financial Contracts Fee Reviewer means a bilateral or multilateral contract entered into with the Company before it entered Special Administration, relating to transactions or positions of a financial nature, including contracts for the delivery or custody of Client Assets (but not including contracts which are purely administrative or contracts for services). means the independent expert appointed by the Creditors Committee to support and advise the Creditors Committee in connection with - 5 -

7 each request by the Administrators for approval of their fees and expenses. FSA means the Financial Services Authority. FSMA means the Financial Services and Markets Act Further Encumbered Distribution Group Custodial Fees shall have the meaning given to it in Clause shall have the meaning given to it in Clause (b). Insolvency Act means the Insolvency Act Late Claim shall have the meaning given to it in Clause Late Claimant shall have the meaning given to it in Clause Liquidated Asset means assets which the Company does not hold because they have been sold or liquidated, but does not include: (a) Pre-Effective Date Liquidated Assets; or (b) assets which have matured or been the subject of a corporate action after the Administration Date. Liquidation Option shall have the meaning given to it in Clause LME Market Price means the London Metals Exchange. means: (a) the value of the Securities on the day in question as determined by a reputable source used by the Company, immediately prior to the Company entering Special Administration, for valuing or reporting in respect of those Securities; or (b) if this if not practicable, the value of those Securities on the day in question as determined by the Administrators which reflects, in the Administrators opinion, a fair and reasonable price for those Securities. Net Asset Claim shall have the meaning given to it in Clause 5.3. Not-Held Client Asset shall have the meaning given to it in Clause Not-Held Client Asset Recovery Costs Objectives shall have the meaning given to it in Clause (d). means the following objectives, (i) Objective 1 is for the Administrators to ensure the return of client money or assets as soon as is reasonably practicable; (ii) Objective 2 is for the Administrators to ensure timely engagement with market infrastructure bodies and the authorities; and (iii) Objective 3 is for the Administrators to either rescue the Company as a going concern or wind it up in the best interests of the creditors

8 Other Client Asset Costs Other Custodial Fees Physically Held Securities Physically Held Securities Return Procedure Potential Claimants Pre-Effective Date Liquidated Asset Pre-Effective Date Liquidation Costs Proceeding Regulations Rent shall have the meaning given to it in Clause (f). shall have the meaning given to it in Clause (c). means Securities which are not Electronically Held Securities (i.e. held in physical form). means the procedure for the return of Client Assets which are classified as Physically Held Securities, as more particularly set out at Part B, Schedule 9 (Return Procedure) means those claimants of Client Assets identified by the Administrators in accordance with Rule 143. shall have the meaning given to it in Clause (e). shall have the meaning given to it in Clause (e). shall have the meaning given to it in Clause (Governing Law and Jurisdiction). means The Investment Bank Special Administration Regulations shall have the meaning given to it in Clause (a). Retained Client Assets shall have the meaning given to it in Clause Return Procedure Rules Securities Securities of a Particular means any of the following procedures for the physical return of Client Assets to Claimants: (a) the Electronically Held Securities Return Procedure; (b) the Physically Held Securities Return Procedure; and (c) any other procedure to return Client Assets that is agreed between the Administrators and a Claimant. means The Investment Bank Special Administration (England and Wales) Rules means financial instruments as defined in regulation 3 of the Financial Collateral Arrangements (No. 2) Regulations means the Securities issued by the same issuer which are of the same 1 For information purposes only and for ease of reference, the provisions of the Regulations relevant to this Distribution Plan have been set out at Schedule 11 (Relevant Statutory Provisions). 2 For information purposes only and for ease of reference, the provisions of the Rules relevant to this Distribution Plan have been set out at Schedule 11 (Relevant Statutory Provisions). 3 For information purposes only and for ease of reference, the provisions of the Financial Collateral Arrangements (No. 2) Regulations 2003 relevant to this Distribution Plan have been set out at Schedule 11 (Relevant Statutory Provisions)

9 Description Security Holder Security Interest class of shares or stock; or in the case of Securities other than shares or stock, which are of the same currency and denomination and treated as forming part of the same issue. shall have the meaning given to it in Clause 11.2 (Shortfall in Client Assets). means, any legal or equitable interest or any other right in security (other than a Title Transfer Financial Collateral Arrangement) created or otherwise arising by way of security including: (a) a pledge, (b) a mortgage, (c) a fixed charge, (d) a charge created as a floating charge, or (e) a lien. Shared Costs Percentage shall have the meaning given to it in Clause Shared Costs Shortfall Shortfall Claim Special Administration Specific Costs Sterling, pound, GBP or Terms of Business Title Transfer Financial Collateral Arrangement means the costs and expenses set out in Clause 14 which have been or will be incurred in the pursuit of Objective 1 and which shall be borne rateably between all Claimants who have an Accepted Client Asset Claim (other than in respect of Not-Held Client Assets (until they cease to be Not-Held Client Assets) and Liquidated Assets), based on the gross value (i.e. prior to the deduction of any relevant Encumbrance and/or the deduction of any relevant Shortfall) of the Client Assets held for them as at the Administration Date. means a shortfall in the amount available for distribution of Securities of a Particular Description held by the Company as Client Assets in a Client Omnibus Account. means the Claimant s claim against the unsecured estate of the Company in respect of the Shortfall. means the special administration of the Company following the appointment of the Administrators to the Company on 31 October 2011, by order of the Court. means the specific costs and expenses set out in Clause 15 which are or will be attributable to the Administrators dealings with an individual Claimant s Client Assets and which are not Shared Costs. means pounds sterling, being the lawful currency of the United Kingdom for the time being. means the Company s retail or non-retail terms of business. shall have the meaning set out in regulation 3 of the Financial Collateral (No 2) Regulations 2003, as set out in Schedule 11 (Relevant Statutory Provisions)

10 Unencumbered Distribution shall have the meaning given to it in Clause 4.1. Unencumbered Client Assets USD or $ Website means Client Assets to which neither the Company nor any third party asserts a Security Interest. means United States dollars, being the lawful currency of the United States of America for the time being. means

11 2 INTERPRETATION In this document: 1. references to a person include an individual, body corporate (wherever incorporated), unincorporated association, trust or partnership (whether or not having separate legal personality), government, state or agency of a state, or two or more of the foregoing; 2. references to a clause or schedule are to a clause or schedule of this document, and references to this document include the schedules; 3. the headings in this document do not affect its construction or interpretation; 4. references to a statute or a statutory provision include references to such statute or statutory provision as amended or re-enacted whether before or after the date of this document and include all subordinate legislation made under the relevant statute whether before or after the date of this document save where that amendment, re-enactment or subordinate legislation is made after the date of this document and would extend or increase the liability of any party under this document; 5. references to writing will be deemed to include any modes of reproducing words in a legible or non-transitory form; 6. the singular includes the plural and vice versa and any gender includes any other gender; 7. if any obligation is to be performed under the terms of this document on a date other than a Business Day, the relevant obligation shall be performed on the next Business Day; and 8. references to value or values shall be to the value at 31 October 2011 unless stated otherwise

12 3 APPLICATION AND EFFECTIVENESS Application of this Distribution Plan 3.1 This Distribution Plan applies to all Client Assets held by the Company as at the commencement of the Special Administration and to cash received by the Company after the commencement of the Special Administration, whether as redemption proceeds, dividends or otherwise, in respect of such Client Assets. Effective Date 3.2 This Distribution Plan shall become effective on, and with immediate effect from, the Effective Date. Client Asset Claims and the assets claimed 3.3 Claims to, or in respect of: Unencumbered Client Assets; Encumbered Client Assets; and Alleged Client Assets, are particularised in table form in Schedules 1 to 3. A Claimant will be able to identify the assets which he has claimed by locating his Client Code (which may appear on more than one of the Schedules) in those Schedules. The assets which appear in those Schedules will be dealt with as set out at Clauses 4 to 8 below. 4 UNENCUMBERED CLIENT ASSETS Please refer to Schedule 1 when reading this Clause The Unencumbered Client Assets are set out in, and (unless they are Not-Held Client Assets or Liquidated Assets) will be returned in accordance with, Schedule 1 (Unencumbered Client Assets) as follows: to the Claimant identified by the Client Code set out in Column 1 (CIS ID); from the account held with the Company set out in Column 2 (Account Code); for the type of Client Asset set out in Columns 3 (ISIN Sec Code) and 4 (Security Description), and in the amount set out in Column 5 (Quantity), less any Shortfall in Column 10 (Shortfall), but subject to payment of the Claimant s Share of Costs as estimated in Column 11 (Share of Costs); in accordance with the Return Procedure set out at Column 12 (Return Procedure) to the Claimant s Account or via liquidation as requested by the Claimant in the Claimant Options Form; and as soon as is reasonably practical after the date specified in Column 13 (Date for return) subject to: (i) the Claimant s Share of Costs having been paid; (ii) the Claimant Options Form having been returned by the Claimant; and (iii) all steps under the Claimant Options Form having been complied with,

13 (an Unencumbered Distribution ). 4.2 For the avoidance of doubt, the Specific Costs set out in Column 11 (Share of Costs) of Schedule 1 (Unencumbered Assets) are estimates only. The Administrators will provide confirmation of the Claimant s Share of Costs, including any relevant Specific Costs following the Effective Date pursuant to Clause ENCUMBERED CLIENT ASSETS Please refer to Schedule 2 when reading this Clause The Encumbered Client Assets are set out in, and (unless they are Not-Held Client Assets or Liquidated Assets) will be returned in accordance with, Schedule 2 (Encumbered Client Assets) in an amount equal to the Net Asset Claim (as defined in Clause 5.3 below and as set out in Column 11 (Net Asset Claim)) as follows: to the Claimant identified by the Client Code set out in Column 1 (CIS ID); from the account held with the Company set out in Column 2 (Account Code); for the type of Client Assets set out in Columns 3 (ISIN Sec Code) and 4 (Security Description), and in the amount set out in Column 5 (Quantity) subject to payment of the Claimant s Share of Costs as estimated in Column 13 (Share of Costs); in accordance with the Return Procedure set out at Column 14 (Return Procedure) to the Claimant s Account or as requested by the Claimant in the Claimant Options Form; and as soon as is reasonably practical after the date specified in Column 15 (Date for return) subject to: (a) (b) (c) (d) the Claimant Options Form having been returned by the Claimant; all steps under the Claimant Options Form having been complied with; the Claimant s Share of Costs having been paid; and where there is an Encumbrance over the Claimant s Client Assets, such Encumbrance being cleared, (an Encumbered Distribution ). 5.2 For the avoidance of doubt, the Specific Costs set out in Column 13 (Share of Costs) of Schedule 2 (Encumbered Assets) are estimates only. The Administrators will provide confirmation of the Claimant s Share of Costs, including any relevant Specific Costs following the Effective Date pursuant to Clause Each Claimant s net asset claim (where the Claimant has an Accepted Client Asset Claim to Encumbered Client Assets) has been calculated as follows: the amount in Column 9 (GBP Value); plus any liabilities owed by the Company to the Claimant in respect of Financial Contracts as set out in Column 10A (Liabilities owed by Company); less

14 5.3.3 any Shortfall as set out in Column 12 (Shortfall); less any liabilities: (a) (b) owed by the Claimant to the Company in respect of Financial Contracts as set out in Column 10B (Liabilities owed to Company); and owed by the Claimant to a third party, who asserts a Security Interest over the Encumbered Client Assets claimed by the Claimant as set out in Column 10C (Liabilities owed to third party), Calculation of liabilities (the Net Asset Claim ). 5.4 If the liabilities referred to at Clauses or of the Distribution Plan are: contingent, the Administrators have valued each contingency in the light of legal and other advice received, by reaching a view as to the likelihood of it occurring and the quantum of the liability should the contingency occur and thereby calculating the Contingency Value. The Administrators intend to take the following approach to calculating a Contingency Value: (i) whether the liability is payable to, or by, the Company; and (ii) as they would take when valuing contingent liabilities for the purposes of Rule 160(1) (i.e. when dealing with the proofs of debt lodged by general unsecured creditors). Schedule 2 (Encumbered Client Assets) incorporates any such Contingency Value; and/or disputed, the Administrators have made an assumption as to the outcome of the dispute, in the light of legal and other advice received, so as to determine the Dispute Value. Schedule 2 (Encumbered Client Assets) incorporates any such Dispute Value. This approach is adopted so that the Client Asset Claim can be paid out (or partly paid out) or Client Assets returned (or returned in part) before the contingency occurs or the dispute is resolved. 5.5 If the liabilities referred to at Clauses or of the Distribution Plan are contingent or disputed and therefore there is a Contingency Value or Dispute Value, this will be indicated by the letters CV (for a Contingency Value) or DV (for a Dispute Value) next to the relevant amount in Column 10A (Liabilities owed by Company), Column 10B (Liabilities owed to Company) or Column 10C (Liabilities owed to third party) in Schedule 2 (Encumbered Client Assets) as applicable. 5.6 The Administrators may revise their determination of a Contingency Value or a Dispute Value if, by reference to any change of circumstances or to information becoming available to the Administrators, the Administrators think it appropriate to do so. The relevant Claimant shall be informed of the Administrators revision to any Contingency Value or Dispute Value. 5.7 If a Distribution has already been made and the Administrators subsequently revise a Contingency Value or a Dispute Value in accordance with Clause 5.6 of the Distribution Plan, where the revision: decreases the Net Assets Claim, the Administrators shall be entitled to receive from the Claimant a payment equal to such decrease; or

15 5.7.2 increases the Net Asset Claim, a further distribution shall be made to the relevant Claimant (a Further Encumbered Distribution ). 6 POTENTIAL CLAIMANTS Please refer to Schedules 1 and 2 when reading this Clause Where a Potential Claimant notified under Rule 143(2) that the Administrators believe the Potential Claimant would have been eligible to submit a claim under Regulation 11(1) has failed to respond to that notice, the Administrators have made provision in the Distribution Plan for Client Assets: to be returned to the Potential Claimant according to the information available to the Administrators in respect of the amount of Client Assets held for the Potential Claimant by the Company; or, as the case may be, to take into account any Security Interest that, according to the information available to the Administrators, the Potential Claimant is entitled to assert over certain Client Assets held by the Company. 6.2 Accordingly, amongst other things: Schedules 1 (Unencumbered Client Assets) and 2 (Encumbered Client Assets) provide for Potential Claimants, who have failed to respond to a notice under Rule 143(2), to have Client Assets returned to them according to the information available to the Administrators in respect of the amount of Client Assets held for them by the Company; and, as the case may be in respect of Encumbered Client Assets, Schedule 2 (Encumbered Client Assets) (a) (b) takes into account the Security Interest that according to the information available to the Administrators, the Potential Claimant is entitled to assert by withholding from the Encumbered Client Assets which would otherwise be distributed to a Claimant, an amount of Encumbered Client Assets which has a value equal (or as close to equal as is possible) to the Potential Claimant s secured claim against the Claimant; and sets out the proportion of Securities which the Administrators are holding back from the Encumbered Distribution. The Administrators are holding back such Securities in order to meet any such Encumbrance, unless and until such Encumbrance is otherwise discharged. 6.3 If the Potential Claimants fail to respond to a notice under Rule 143(2) and the value of their Encumbered Client Assets reduces, such that the value of those Encumbered Client Assets may not satisfy the Encumbrance, the Administrators may liquidate the Encumbered Client Assets if they deem it necessary to preserve sufficient funds to meet the Encumbrance over those Encumbered Client Assets. 7 ALLEGED CLIENT ASSETS Please refer to Schedule 3 when reading this Clause The Alleged Client Assets are set out in Schedule 3 (Alleged Client Assets). Schedule 3 (Alleged Client Assets) has been included to enable Claimants to identify that, in respect of the Alleged Client Assets, their claims have been received but have not been accepted

16 7.2 The details set out in Schedule 3 (Alleged Client Assets) have been included for information purposes only. 7.3 Subject to Clauses 8 (Client Assets Not Under the Control of the Administrators) and 10 (Corporate Actions and Matured Client Assets), if the Administrators determination in relation to the status of Alleged Client Assets is later reversed by the Administrators themselves or by the Court, then: the relevant Client Assets will be distributed in accordance with the procedure for Unencumbered Client Assets or Encumbered Client Assets above, as appropriate, as soon as is reasonably practicable thereafter; the relevant Claimant will be liable for their Claimant s Share of Costs (including Shared Costs, notwithstanding that those Shared Costs have been apportioned to other Claimants); and Claimants who have already received a Distribution shall be entitled to a rebate on part of their Claimant s Share of Costs, PROVIDED THAT the rebate exceeds GBP 200 per Claimant; and any applicable rebate shall be paid by the Administrators as soon as reasonably practicable after determination that the rebate exceeds the threshold set out in Clause above. 8 CLIENT ASSETS NOT UNDER THE CONTROL OF THE ADMINISTRATORS 8.1 Not-Held Client Assets If an Accepted Client Asset Claim is to a Client Asset which is not under the Administrators control as at the date of this Distribution Plan (because, for example, such Client Asset is in the possession, or is under the control, of a third party) and such Client Asset has not been returned to the Administrators by the Effective Date (a Not-Held Client Asset ), the Claimant will not be entitled to a Distribution, unless and until such Client Asset is returned to the Administrators Where the Not-Held Client Asset is returned to the Administrators after the Effective Date: (a) (b) (c) (d) (e) it shall no longer be a Not-Held Client Asset; the relevant Client Asset will be distributed in accordance with the procedure for Unencumbered Client Assets or Encumbered Client Assets above, as appropriate, as soon as is reasonably practicable thereafter; the relevant Claimant will be liable for their Claimant s Share of Costs; Claimants who have already received a Distribution may be entitled to a rebate on part of their Claimant s Share of Costs pursuant to Clause 18 (Rebates), PROVIDED THAT it exceeds GBP 200 per Claimant; and any applicable rebate shall be paid by the Administrators as soon as reasonably practicable after determination that the rebate exceeds the threshold set out in Clause (d) above

17 8.1.3 Subject to Clause 8.1.4, if an Accepted Client Asset Claim is to a Not-Held Client Asset which has not been returned to the Administrators by the Effective Date, the Claimant may, within 10 Business Days of the Effective Date, elect to: (a) (b) notify the Administrators in writing that it releases the Company from any obligation to return the Not-Held Client Asset to the Claimant if it is ever returned to the Company; and submit a proof of debt under Rule 152 as an unsecured claim for the value of the Not-Held Client Asset (if for Securities, the value shall be calculated by the Administrators in accordance with Rule 91), notwithstanding the fact that the last date for proving as an unsecured creditor has passed The Administrators may extend the time period referred to in Clause If the Not-Held Client Assets are not returned to the Administrators within 12 months of the Effective Date, the Administrators may, as they deem appropriate, make an application to Court for directions under paragraph 63 of Schedule B1 of the Insolvency Act, as applied by Regulation Liquidated Assets Certain Claimants with claims to Alleged Client Assets may have claims to Liquidated Assets In such cases, subject to the Court determining otherwise, those Claimants with claims to Alleged Client Assets who are determined to have an Accepted Client Asset Claim to Liquidated Assets after the Effective Date will not receive a Distribution under the Distribution Plan Such Claimants shall automatically have a claim against the Company as a general unsecured creditor with respect to the value of that Client Asset as at the Administration Date, unless the Court orders otherwise For the avoidance of doubt, this Clause 8.2 shall not prejudice any claim for client money (or other claim) that a Claimant may assert in respect of a Liquidated Asset. 9 SUSPENDED, DELISTED OR UNLISTED SECURITIES 9.1 Unless the Court orders otherwise, if a Claimant with an Accepted Client Asset Claim has a claim to a Client Asset which: was suspended from trading, delisted or unlisted as at the Administration Date (for example, where the relevant Client Asset relates to a company which was in administration as at the Administration Date, or in respect of a Client Asset which was the subject of an acquisition offer as at the Administration Date) and as at the Effective Date has not been readmitted to trading as at the date of Distribution; or is suspended from trading, delisted or unlisted at the Effective Date and has not been readmitted to trading as at the date of Distribution, the Claimant will not be entitled to a Distribution in respect of those Client Assets, unless and until the Administrators no longer value the Client Asset at zero in accordance with Clause

18 9.2 If, within, 12 months of the Effective Date, such Client Assets have not been relisted, or the Administrators have not been able to establish a value other than zero for that Client Asset in accordance with Clause 20.4, the Administrators may, if they deem it appropriate, make an application to Court for directions under paragraph 63 of Schedule B1 of the Insolvency Act, as applied by Regulation 15, to seek the Court s guidance as to how to deal with those Client Assets. 10 CORPORATE ACTIONS AND MATURED CLIENT ASSETS 10.1 Corporate Actions If a Claimant asserts a Client Asset Claim in respect of an asset ( Relevant Asset ) which has been subject to any corporate action after the Administration Date which resulted or will result in: (a) (b) cash being received by the Company (otherwise than at the maturity of the Relevant Asset); and/or a change in the nature of the Relevant Asset (for example as a result of a stock split or merger and acquisition activity), then, subject to Clause 8 (Client Assets not under the control of the Administrators) if: it is an Accepted Client Asset Claim, any assets arising by operation of Clauses (a) or (b) shall be subject to a Distribution in accordance with the relevant regime for the return of Unencumbered Client Assets or Encumbered Client Assets from which the assets referred to a Clauses (a) or (b) derived and such Distribution shall be subject to the terms of this Distribution Plan (including a liability to meet that Claimant s Share of Costs); or it is an Alleged Client Asset: (a) (b) (c) the assets referred to at Clauses (a) or (b) shall be held by the Administrators until the status of the Alleged Client Asset has finally been determined (either by the Administrators themselves or by the Court); and if the Administrators determination of the status of the Alleged Client Asset is reversed by the Administrators themselves or by the Court, the proceeds received on maturity shall be subject to a Distribution in accordance with the relevant regime for the return of Unencumbered Client Assets or Encumbered Client Assets from which the assets referred to at Clauses (a) or (b) derived and such Distribution shall be subject to the terms of the Distribution Plan (including a liability to meet that Claimant s Share of Costs); and a Distribution contemplated by (b) above, shall take place as soon as is reasonably practicable following the reversal of the Administrators determination For the avoidance of doubt, the Claimant s Share of Costs will be calculated based on the value of the Client Asset held as at the Administration Date, and not additionally on the fruits of subsequent corporate actions Matured Client Assets

19 If a Claimant asserts a Client Asset Claim in respect of an asset which has matured after the Administration Date then, subject to Clause 8 (Client Assets not under the control of the Administrators), if: (a) (b) it is an Accepted Client Asset Claim, the proceeds received on the maturity of that asset shall be subject to a Distribution in accordance with the relevant regime for the return of Unencumbered Client Assets or Encumbered Client Assets and shall be subject to the terms of this Distribution Plan (including, for the avoidance of doubt, a liability to meet that Claimant s Share of Costs); or it is an Alleged Client Asset: (i) (ii) (iii) the proceeds received on the maturity of that asset shall be held by the Administrators until the status of the Alleged Client Asset has finally been determined (either by the Administrators themselves or by the Court); and if the Administrators determination of the status of the Alleged Client Asset is reversed by the Administrators themselves or by the Court, the proceeds received on the maturity of that asset shall be subject to a Distribution in accordance with the relevant regime for the return of Unencumbered Client Assets or Encumbered Client Assets and such Distribution shall be subject to the terms of the Distribution Plan (including a liability to meet that Claimant s Share of Costs); and a Distribution contemplated by (ii) above, shall take place as soon as is reasonably practicable following the reversal of the Administrators determination For the avoidance of doubt, the Claimant s Share of Costs will be calculated based on the value of the Client Asset held as at the Administration Date. 11 SHORTFALL IN CLIENT ASSETS 11.1 To the extent that the Administrators become aware that there is a Shortfall and the Shortfall cannot be remedied following the resolution of on-going disputes, the Shortfall shall be borne pro rata by all clients of the Company for whom the Company holds Securities of that Particular Description in proportion to their Accepted Client Asset Claims against those Securities A person (including the Company) (a Security Holder ) with a Security Interest over Securities held in the Client Omnibus Account on behalf of a particular Claimant shall be entitled to participate in Distributions and Shortfall Claims in respect of those Securities in accordance with their entitlement as against that Claimant (subject to the treatment of Late Claims as described in Clause 29 (Treatment of Late Claimants and Amendments to Distribution Plan)) Security Holders shall not, at any time, be entitled to claim in aggregate in excess of the Distribution which the Claimant would have been entitled to if there had been no Client Asset Claim by the Security Holder(s)

20 11.4 Clause 11.1 shall limit correspondingly the rights of the Security Holder in respect of the Distribution (but this shall not affect the right of the Security Holder in respect of a Claimant s Shortfall Claim) Where there is a dispute between Claimants as to their respective share of a Distribution, the Administrators may: make the Distribution in accordance with an agreement drawn up between the parties in dispute; or lodge the Securities that are the subject of the dispute with the Court, and if the Administrators pursue either course of action, their obligations in respect of Objective 1 with regard to these Securities shall be deemed to be discharged A Claimant s Shortfall Claim shall rank as a claim against the unsecured estate of the Company The value of a Claimant s Shortfall Claim shall be based on the Market Price for those Securities to which the Shortfall Claim relates on the date the Company entered Special Administration A Claimant s Shortfall Claim shall automatically be deemed to have been submitted as a proof of debt under Rule 152 as an unsecured claim, without the need for the Claimant to take any further action. 12 RETAINED CLIENT ASSETS 12.1 The Administrators only intend to retain Client Assets in accordance with this Clause 12 (Retained Client Assets) if the Claimant does not opt for, and discharge its obligations under, the Cash Option Subject to Clause 12.5, the Administrators intend to retain certain of the Client Assets held by the Company (the Retained Client Assets ) to pay the expenses of the Special Administration attributable to the Administrators pursuit of Objective 1 (to the extent that those expenses do not relate to Client Assets received or held, or which should have been held, by the Company in accordance with Rules made by virtue of section 139 of FSMA (clients money)) The Retained Client Assets are set out at Column 14 (Retained Client Assets) of Schedule 1 (Unencumbered Client Assets) and at Column 16 (Retained Client Assets) of Schedule 2 (Encumbered Client Assets) The Retained Client Assets will reduce the amount of Client Assets to be returned to Claimants at least in the first instance by 6.74% by value The amount of Retained Client Assets: may increase if the value of the Client Assets decreases and/or the Specific Costs increase; or may decrease if Claimants opt for the Cash Option to pay the Claimant s Share of Costs

21 13 COSTS OF RETURNING CLIENT ASSETS 13.1 Paragraph 99(3) of Schedule B1 to the Insolvency Act (as applied by Regulation 15(4) and (5)) and Rule 135 require the Administrators remuneration and expenses of the Special Administration incurred in respect of the pursuit of Objective 1 to be paid out of Client Assets The Administrators have determined that the fairest approach to apportioning the expenses incurred in their pursuit of Objective 1 (excluding the expenses relating to client assets received or held, or which should have been held, by the Company in accordance with rules made by virtue of section 139 of FSMA (clients money)) between Claimants is to charge each Claimant with an Accepted Client Asset Claim: (i) a pro rata share of the Shared Costs and (ii) the Specific Costs attributable to his/her claim or the assets he/she claims The Claimant s Share of Costs are set out in detail at Clauses 14 (Shared Costs) and 15 (Specific Costs) and comprise: expenses properly incurred by the Administrators in pursuing Objective 1; necessary disbursements by the Administrators in the course of the Special Administration specific to the achievement of Objective 1 (including any expenses incurred by client members of the Creditors Committee or their representatives and allowed for by the Administrators under Rule 119 but not including any payment of corporation tax in circumstances referred to in Rule 134(1)(k)); the remuneration or emoluments of persons employed by the Administrators to perform services for the Company specific to the achievement of Objective 1, as required or authorised under the Regulations or the Rules; and the Administrators remuneration the basis of which has been fixed under Rule 196 and unpaid pre-administration costs approved under Rule 136 in respect of the work done in pursuance of Objective SHARED COSTS 14.1 Where the Effective Date falls on or before 31 July 2012, the Shared Costs shall be borne rateably by the Claimants with Accepted Client Asset Claims at the rate of 6.74% of the gross value of their Client Assets as at the Administration Date (the Shared Costs Percentage ). The Shared Costs comprise time spent and costs incurred up to and including the Effective Date, and a provision in respect of costs which will be incurred up to and including the Effective Date, in pursuing Objective 1 in: locating Client Assets; identifying Client Asset Claims and establishing and agreeing entitlements to Client Assets, including a 50% proportion of the costs incurred by the Administrators in assessing general legal principles relevant to determining whether certain assets are Client Assets or client assets received or held, or which should have been held, by the Company in accordance with rules made by virtue of section 139 of FSMA (client money); developing and maintaining the infrastructure to service Client Assets prior to the distribution of those assets under the Distribution Plan; liaising with custodians for the transfer of Client Assets; and

22 drafting this Distribution Plan, including liaising with the Creditors Committee, the Consultation Claimants, the FSA and applying to Court for approval of this Distribution Plan (including the FSA s costs of appearing on the hearing of the application for approval of the Distribution Plan), by the following parties: (a) (b) (c) the Administrators and their staff (including 2.3% of the general overheads and provisions incurred by the Administrators and their staff); the Company s staff (including 2.3% of the general overheads and provisions incurred by the Company s staff); and the Administrators legal advisors Where the Effective Date is after 31 July 2012, the Shared Cost Percentage shall be reviewed by the Administrators to determine whether the Shared Cost Percentage should be adjusted to incorporate any additional Shared Costs that may be incurred after 31 July 2012 over and above those Shared Costs anticipated (and duly provided for) by the Administrators on the assumption that the Effective Date will fall on or before 31 July Any adjustment to the Shared Cost Percentage shall be communicated to Client Asset Claimants following such review by the Administrators, within 10 Business Days of the Effective Date. 15 SPECIFIC COSTS 15.1 Where the Effective Date is on or before 31 July 2012, the Specific Costs shall, up to and including the Effective Date, comprise the following: Distribution Costs: the costs and expenses associated with the relevant Distribution Options, including, but not limited to: (a) (b) where a Claimant instructs the Administrators to transfer some, or all of the Claimant s Client Assets to another custodian in an account in the name of that Claimant, the cost of delivering the relevant Client Assets; and/or where a Claimant instructs the Administrators to liquidate some or all of the Claimant s Client Assets, the cost of liquidating those Client Assets, including any applicable brokerage fees and other fees associated with the wiring of the liquidated cash positions, the approximate costs of which are set out in Schedule 12 (Delivery Costs for the return of Client Assets), and Unique Costs: Subject to Clause 26 (Adjudication process in relation to Specific Costs only), where the Administrators have incurred costs and/or expenses relevant to the maintenance or service of that particular Client Asset prior to Distribution, including, but not limited to: (a) (b) any rent due and payable in respect of metals and/or gold warrants ( Rent ); custodial fees associated with a group of particular Client Assets and which have not been considered for the purposes of calculating the Shared Costs Percentage ( Group Custodial Fees );

23 (c) (d) (e) (f) other custodial fees which are not Group Custodial Fees ( Other Custodial Fees ); unless the Court orders otherwise, any costs and expenses incurred in relation to the recovery of the Not-Held Client Assets which the Administrators determine shall not be Shared Costs and which have not been considered for the purposes of calculating the Shared Costs Percentage ( Not-Held Client Asset Recovery Costs ); any costs and expenses incurred in relation to the liquidation of Client Assets at the Claimant s request prior to the Effective Date (a Pre- Effective Date Liquidated Asset ) (including the drafting and negotiation of any relevant documentation to effect the liquidation) (the Pre- Effective Date Liquidation Costs ); and unless the Court orders otherwise, any costs and expenses incurred in relation to Client Assets which the Administrators determine shall not be Shared Costs and which have not been considered for the purposes of calculating the Shared Costs Percentage ( Other Client Asset Costs ), including, but not limited to, costs and expenses incurred: (i) in respect of proceedings brought by a Claimant which relate to any decision of the Administrators: (A) (B) not to consent to the lifting of the statutory moratorium; or not to classify an Alleged Client Asset as a Client Asset, but, in each case, only if the Administrators reasonably determine that such proceedings would not have been required had the Claimant provided the Administrators with the same evidence it provided to the Court in order to determine its claim, such costs shall be considered Specific Costs to be paid by the respective Claimants as follows: (g) (h) (i) (j) (k) (l) in respect of Rent, by the individual Claimant, in full; in respect of Group Custodial Fees, such fees shall be shared pro rata among the group of Claimants entitled to those Client Assets; in respect of Other Custodial Fees, by the individual Claimant, in full; in respect of Not-Held Client Asset Recovery Costs, such fees shall be shared pro rata among the group of Claimants entitled to the relevant Client Assets; in respect of the Pre-Effective Date Liquidation Costs, by the individual Claimant, in full; and in respect of Other Client Asset Costs, by the individual Claimant, in full For the avoidance of doubt, nothing in this Clause 15 shall operate to override or supersede the terms of any agreement entered into prior to the Bar Date for the return of Client Assets

24 15.3 Where the Effective Date is after 31 July 2012, the Specific Costs shall be reviewed by the Administrators to determine whether the Specific Costs attributable to an individual Claimant should be adjusted to incorporate any additional Specific Costs incurred after 31 July Any adjustment to the Specific Costs attributable to an individual Claimant shall be communicated to the relevant Claimant before that Claimant is requested to pay its Claimant s Share of Costs. 16 CLAIMANT S SHARE OF COSTS AND NOT-HELD CLIENT ASSETS 16.1 Costs attributable to the Not-Held Client Assets shall not constitute part of the Shared Costs Percentage unless and until the Client Asset is (i) returned to the Administrators and (ii) becomes available for Distribution in accordance with this Distribution Plan Following the receipt of Not-Held Client Assets, the Shared Cost Percentage shall be reviewed by the Administrators from time to time to determine whether the Shared Cost Percentage should be adjusted. Any adjustment to the Shared Cost Percentage shall be communicated to Client Asset Claimants following such review by the Administrators If the Administrators determine that, as a result of the receipt of Not-Held Client Assets, Claimants who have already received a Distribution are entitled to a rebate in respect of a proportion of their Claimant s Share of Costs, Clause 18 (Rebates) shall apply In the event that Not Held Client Assets are returned to the Administrators, the Claimants entitled to such Not-Held Client Assets shall pay their Claimant s Share of Costs in accordance with the terms of this Distribution Plan. 17 CLAIMANT S SHARE OF COSTS AND ALLEGED CLIENT ASSETS Costs incurred in relation to determining whether Alleged Client Assets are Client Assets shall be allocated as follows: On or before the Effective Date 17.1 Unless the Court orders otherwise, subject to Clause 8 (Client Assets not under the control of the Administrators), if the Administrators determination in relation to the status of Alleged Client Assets is reversed by the Administrators or the Court on or before the Effective Date, then: the costs and expenses incurred by the Administrators in relation to the relevant Client Assets shall form part of the Shared Costs as costs incurred in pursuit of Objective 1 unless the Administrators reasonably determine that in reaching such determination they have incurred Other Client Asset Costs and such costs should be allocated to the relevant Claimant as Specific Costs; the relevant Claimant will be liable for its Claimant s Share of Costs (including Shared Costs); and the relevant Client Assets will be distributed in accordance with the procedure for Unencumbered Client Assets or Encumbered Client Assets, as appropriate, after the Effective Date. After the Effective Date