MF Global Singapore has been ordered by the Singapore Exchange (SGX) not to take on new derivatives positions. SGX also ruled that the company may only reduce existing positions.

The Monetary Authority of Singapore (MAS) also issued a statement on Monday, directing MF Global Singapore "not to take on new positions with immediate effect in respect of all its regulated activities, except for reductions or liquidations of positions."

The MAS and SGX would continue to monitor the situation closely.

Meanwhile in New York, MF Global has filed for bankruptcy, after confidence in the firm was shattered by a string of losses from European public debt holdings.

The trade in MF Global shares was earlier Monday halted on the New York Stock Exchange as the New York Federal Reserve announced that the brokerage firm was "suspended from conducting new business with the New York Fed."

In a brief statement on its website, the New York Federal Reserve said the suspension will continue until MF Global shows it is fully capable of meeting its policy requirements regarding relationships with primary dealers or until it terminates MF Global's status as a primary dealer.

MF Global is one of 22 primary dealers at the New York Fed, with four added this year. Read More

The SGX added that MF Global, a clearing member, had informed the exchange that it would not enter into new securities transactions. SGX said MF Global was meeting its financial obligations to SGX's derivatives clearing house.

The New York Federal Reserve also suspended new business with MF Global yesterday amid reports that the securities firm was desperately trying to sell itself. The New York Stock Exchange halted trading in MF Global shares before the market opened.

MF Global Holdings, the holding company for the broker-dealer run by former New Jersey Governor and Goldman Sachs co-chairman Jon Corzine, filed for bankruptcy after making bets on European debt.

The Wall Street Journal , which reported that MF Global had invested US$6 billion (S$7.5 billion) in sovereign bonds issued by European countries, said Interactive Brokers would bid US$1 billion under a court-supervised auction.

The New York-based firm listed total debt of US$39.7 billion in its Chapter 11 papers filed in the United States Bankruptcy Court in Manhattan.

Affiliate MF Global Finance USA also filed, with debt of as much US$50 million. The unit's largest unsecured creditors include JPMorgan Chase Bank, as trustee for holders of US$1.2 billion in debt, and Deutsche Bank Trust, as trustee for holders of US$690 million in debt.

MF Global shares plunged 66 per cent last week. Its credit was dropped to "junk" status by several agencies, which cited concerns about the firm's exposure to European debt.

It also reported its biggest-ever quarterly loss, US$186.6 million, for the fiscal second quarter. MF Global blamed the loss on weaker-than-expected trading revenue and one-time costs.

As for the holdings in debt from countries including Belgium, Italy, Spain, Portugal and Ireland, Mr Corzine said he expected the firm to "successfully manage these exposures to what we believe will be a positive conclusion in December 2012".

Until yesterday, MF Global was a major player and among 22 companies considered financially secure enough to act as "primary dealers" for the Fed to sell US government debt. Read More

Swarch: yahoo finance singapore, bloomberg, singapore stock exchange, sti, sti index, Singapore Exchange Limited (“SGX”), MF Global Singapore Pte Limited (“MF Global”