ANT FXCR4NGE

ASRTNGTON FACINGInformation Pursuantto

DC

COMM1ON20549

PAGE

SECFILENO8-18704

Section

of Brokers Required 17 of the Securities

and Rule

and Dealers Exchange Act of 1984 17a- Thereunder

REPORT FOR THE PERIOD BEGINNING

04/01110

AND ENDING

o3/siJu

MMJDDTY

MM/DDYIDENTIFICATIONOfficial

REGISTRANT NAME OF BRORER-DEALER

MF

Global

Inc.-

Use

Only

NO

ADDRESS OF PRINCIPAL PLACE OF BUSINESS

Do not4408

use P.O Box

No20th

LaSalle Street

FL

ZTON$tsr-

eRNCH

Chicago City

Illinois State

60605Zip Code

NAME AND TELEPHONE

NUMBER OF PERSON TO CONTACT

IN REGARD

TO THIS REPORT312-548-1400Area CodeTelephone

Christine Serwinski

No

ACCOUNTANT

mENTDICATI0Nin this

INPNDENT2Vaine-.lf

PUBLICstate

ACCOUNTANTlastfirst

whose

opinion

is

contained

Report

individual

middle

name

PricewaterhouseCoopers One North Weaker Drive Number and Street ADDRESSCI1ECE

LLPChicagoCity

ILState

60606Zip

Code

ONECertified

Public Accountant

Public

Accountant not residentin

Accountant

United

States or

any of

Its

possessions

FOR OFFICIAL USE ONLY

5Cjaims

for

exemption must

from

the requirement by statement

that

the

annual

report

be

covered

by

the

opinionbasis for

of the

an

independent See

publicsection

accountant

be supported

of facse

cunstanees

relied

on as the

exemption

240.17a-5fr.f _________________________________

-2-

OATH OR AFFIRMATIONChristine

Serwinski_financial

swear

or affirm thatandsupporting

to

the

best

of

my

knowledgeto the

andthe

belief

the

accompanying

statements are true

schedules further

pertaining

firm of

MF

Global

1n

as of

March 31 2011proprietor solely as that of

and correctofficer

swear or affirm that neither has anyproprietary

companyaccount

nor any partnerclassified

principal

or director

interest in any

customer

WIRSHA

Notary Public

CARTER MCKINNE NOTMYPUSLC .$TAT OF LUNOS MY CO

This report Facing Page Statement of Financial Statement of Operation Statement of Cash Flows

contains

check

all

applicable

boxes

Condition

Statement of Changes in Stockholders

Equity of Partners or Sole Proprietors

____

Capital

Statement of Changes Computation ComputationInformation 1503-3 Reconciliation Capital Under

in Liabilities

Subordinated

to

Clathis

of Creditors

of Net Capitalfor

Determination of Reserveto the Possession

Requirement

Pursuant

to

Rule 15c3-8 Rule

Relating

or Control Requirements

Under

including

appropriate

explanation of the computationfor

of Net

Rule 15c3-1

Reserve Schedule

Requirementsof Segregation

Under

and the Computation Rule 15c3-8 Exhibit and Funds

Determination of the

Requirements Actthe audited to methods

in

Segregation

Pursuant to

____

Commodity ExchangeReconciliation Condition with

betweenrespect

and unauditedof consolidation

Statements

of Financial

in

An

Oath or Affirmationof the

Copy

SIPC Supplemental Report any materialinadequacies audit

Report describingexisted since the

found

to

exist

or found to have

date

of the previous

For conthtiona

of confidential

treatment

of certain

portions

of this

Jing

see section

240.17a-5e8

pwc

Report of Independent

Auditors

To the Board

of

Directors

and Stockholder

of

MF

Global

Inc

In

our opinionfinancial

the

accompanyingof

statement

of

financial

condition

presents

fairly in

in

all

material

respects

the

position

MF

Globalin

principles

generally

accepted

at March 31 2011 the 0Company This financial the United States of America

no

conformity

with accountingis

statement

the

responsibility

of the

Companys management

Our

responsibility audit of

is

to expressin

an opinion onaccordance

this financial auditing

statement standards

based on our auditgenerally the auditmaterial

Wein

conducted

our

of

this

statement

with

acceptedto

the United

States

America

Those

standards

require that offinancial

we

plan

and performis

obtain

reasonable

assurance includes statement

about

whether

the statementtest

condition

free

of

misstatementin

An

audit

examIning onassessing

basis

evidenceprinciples

supporting

the

amounts

and disclosuresestimatesthat

the

financial

the accountingoverall financial

used and

significant

made

by

managementreasonable

and evaluating thebasisfor

statement

presentation

We

believe

1Lvpouraudit

provides

our opinion

LE

May28

2011

PricewaterhcuseCooper

LLP One 3122982001

North

Wacker

Chicago IL 60606

ji2 298 2000

www.pwc.com/US

MF

Global

Inc

Index

March3l2011

PagesReport of independent Auditors

Statement of Financial

Condition

Notes

to

Statement of Financial

Condition

3-26

MF

Global

Incof Financial

Statement

Condition

March 31 2011

Assets CashRestricted Securities Securities Securities

67718100cash and purchasedsegregatedsecurIties to resell

9646819800including

under agreements

$7639105800

at

fair

value

5015254800 1852232000 5250064800

borrdownedat fair

value

$4354357000andclearing

pledged net of allowance

Receivablesof

brokers

dealers

organizations

$1491400customers andaffiliates

1880494500non-customers net of allowanceof

Receivables Receivables

$6534800

217868100 4195914400 1570300 4225000 41587600

net

Other receivables MembershipsFurniturein

exchanges and

at cost leasehold of

market value Improvements

$12770700net of accumulated

equipment and

depreciation intangible Deferred

amortization of

$28439500amortization of

assets

net

accumulated

$93877100

36700500 72713300 16250500 28299413700

tax assets

Other assetsTotal assets

Liabilities Liabilities Securities Securities Securities

and

stockhoIdeis

equity

sold

under agreements

to repurchase

including

$3439212600

at

fair

value

11610669300 702356100 4877608200 353033000 8233668300 1525467700 63805300 27366607900

loaned

sold not yet purchasedbrokers dealers

at

fair

value organizations

Payables Payables

and

clearing

customers and

non-customers

net affiliates Paysbies Accrued expenses and other TotalliabilitIes

liabIlities

Commitments

and

contingencies

Note 16

Subordinated borrowings Stockholders equItyTotalliabilities

55000000377805800andstockholders equity

28299413700

The

accompanying

notes

are

an

integral

part

of

this financial

statement

MF

Global

Incof Financial

Notes to Statement

Condition

March 31 2011

OrganizatIon

Global

USA

Inc

Inc the Company United Holdings

or

MFGIWhich

Is

wholly..owned

subsidiary parent

ofIs

States

corporationIs

1he

ultimata

MF MF

Global Global

Holdings Holdings

Ltd

LtdMFGIdealeris

Delaware

corporation

publicly

traded

on the

New

York Stock Exchange

registeredIs

with the Securities

and

Exchange

Commission

CSECInc

as

securities broker-

and

memberExchange

of the Financial

Industry

Regulatory

Authority

Board OptionsClearing

CBOEThe

FINRA

Chicago income

National

Securities the

Clearing

Corporation and

Fixed

Corporation

F1ccwith the

CBOE

Is

Companys

designated

self-regulatory

organization

MFGI

is

also registered

Commodity

Futures Trading

Commission

CFTC asanIndustry

futuresself-

commissionregulatory

merchant

and

is

member

of the National

Futures Association Mercantile

Chicago Kansas

member of the Chicago Additionally MFGI is agency Board of Trade New York Mercantile ExchangeBoard of Trade andMinneapolis Grain

Exchange

NYMEXThe

CME

Intercontinental

Exchange

City

Exchange

CME

is

the

Companys

designated

self-regulatory organization

In

February of 2011 the Companyof

Bank

Newand

Yorkof

This designation

was named one enables MFGI

of to

20 primary dealersserve

to the Federal

Reserve

as

counterpartydirectly In

to the Federal

Reserveauctions

Bank

New

York

fri

provide

analysis

open-market and market

operationsIntelligence

participate to

U.S

Treasury

the Federal

Reserves

trading

desks

The

Company

provides

brokerage

services

to

customers andthrough

affiliates affiliates in

onor

United

States

securities

and futurescorrespondentin

exchangesclearing

and on overseas brokers

exchangesis

The Companyloan

also

engaged

Independent and proprietary principal agreements

trading

U.S government

and corporate

securities futuresactivities

repurchase

and resaIe

as

well

as stock/bond

borrow and

stock/bond

Slgnfficant

Accounting

PolicIes

Use of EstimatesThepreparation of the statementin

of

financial

condition

In

conformity

with accountingto

principles

generally

accepted

the United

States

of

America

requires

managementilabilitles

make

estimates

and

assumptions assets and liabilities at the datefrom those

that affect

the reported

amounts

of assets of

and

and

disclosure

of contingent

of the statement

financial

condition

Actual

results

may

differ

estimates

Fair

Value

of

Financial

Instruments Standards CodificationFairin

The Company adopted the provisions of Accounting Value Measurements and Disclosuresreceivedto sell

ASC 820as the price betweenthat

FaIr

ASC 820liability

value

is

defined

would be

an asset or paid measurementreflected

to

transfer

an orderly transactionSecurities condition

marketnot

participants yet

at the are

date or an

exlt price offinancial

owned andat fair

securities sold

purchased

on the statementfor

value

and

are recorded

on

trade date

basisits

Fair valuefinancial

these

instruments

includes

related

accrued

interest

TheIn

Companyaccordanceproductfixed

values with

instruments

based on quoted mid

market pricesits

where

applicable

market convention the Company valuesIs

financial

instruments securities

based on

class

Fair value securities

generally

bid

or

price

for fixed

income

owned and

ask

for

income

sold not yet purchasedIf

Exchange

traded

products the

are valued

based onfair pricIng

quoted value

market prices based

listed

prices

or quotes

are not available executable

Company

determines

on comparable

market transactions

broker

quotes or independent

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

sources with reasonablefor

levels

of

price

transparency

Fair

value

measurements

are not adjusted

transaction

costs

Managementstatement of

estimatesfinancial their

the aggregate

fair

value

of other

financial

instruments accrued reported

recognized

on the

condition

Including

receivables

payables andareeither

expensesat fair

approximatesshort-termin

fair

value as suchinterest at

financial

Instruments

value

or are

nature bearestimates

current value

market rates or are subject to frequentdebt

repricing offinancial

Managementconditionto

the carryingfair

of the subordinatedinterest

on the statement

approximatesrepricing

value as the loans bar

at current

market rates and

are subject

frequent

Credit

risk

Is

componentor

of

fair

value

which

is

based on the

loss

the

Company wouldholdsin

incur

if

counterparty

an issuer of

securities to

or other Instruments

the

Company

fails credit

to

performquality

underthird

its

contractual

obligationssecuritiesits

the

Companythe

or

upon

deterioration

the

of

parties

whoseIn that

or other Instrumentsactivities

the

Company holdsgenerally with

To reduce

the

Compans

creditexposures counterpartles

operatingit

Companyand

enters

permit

to

offset

receivables

pyabies

into agreements with Its such counterparties and obtain

from the counterparty on an upfront and ongoing basis The Company margin and/or collateral monitors and manages its credit exposures daily The Company considers the impact of credit risk In the valuation of its assets and its own credit of Its risk in the valuation counterpartyliabilities

that are presented

at fair

value

Financial value

instn.iments

are categorized asfurther In

Into

three-levelIn

valuation

hierarchy gives

for

disclosure

of

fair

measurements quoted

discussed markets

Note

The

hierarchy

the highest

priority

to

unadjusted

pricesto

active

for identical

assets or

liabilities

andare or

the lowestsufficient

priority

unobservable

inputs basis

Levelto

measurementscurrentpricing

Level market

measurementsis

activefor

if

there

transactionspricing

on an ongoingis

provide

information

the asset

liability

Information

released

publicly

and

price quotations inputsreflect

do not vary substantially

either over participants

time or

among market makersusein

Observableorliability

would

pricing

the asset

assumptions market based on market date obtained from sourcestheis

independentIn

of the reporting of

entityliability

The

fair

value

hierarchy

based on the observabilityIn

of inputsfair

the valuation hierarchy reporting

an asset ortheall

at the

measurementdetailedfor

dateanalysisfair

determiningIts

the appropriate

value

levels period

Companyandare

performsliabilities

of

assets

and

liabilitiesis

At

each

assets inputs

which the

value

measurement

based on as follows

significant

unobservable

classified

as Level

The three levels are described

Levelfor

Unadjusted

quoted

prices or

in

active

marketsLevel

that

are accessible offinancial

at

the

measurement

datefair

identical are

unrestricted

assets

liabIlItIes

consists

instruments

whose

values

determined using quoted

market prices

Level that is

Quoted marketsin

prices

for identical

or

similar

assets

or

liabilities

in

marketsliability

that

are less activefor

which there are few transactions term modelsIncludedin

for

the asset orfinancial

that

are observablefor

substantially the are estimated

full

Level

are those

instruments

which

fair

values

using

or other valuation various

methodologiesinputs

These

models aretime

primarily yield

industry-standardvolatility

modelsobservablewell

utilizing

observable

including pricesfor

value

curve

factors

current

market and

contractual

the underlying

financial

instruments

as

as other relevant economic

measures

Level

Prices

or valuation

techniques

that

require

Inputslittle

that

are both

significant

to

theis

fair

value

measurement

and

unobservable

i.e

supportedfair

by

or

no market activityutilizing readily

Level

Instruments comprised of financial models or methodologies utilizing

whose

value

Is

estimated are not

internally

developedfrom objective

significant

Inputs

that

observable

sources

MF

Global

Incof Financial

Notes March

to Statement

Condition

31

2011

Securities

Transactionssecurities

Customer

transactions

are recognized

on

settlement

date

Principal fbced

and

proprietary securities

securities

transactionsprofit

primarily

represent

the

Companys

Investment

In

income

The

related

and

loss are recorded

on

trade date

basis

Interest

incomeis

related

to

resale

agreements

securities

lending

and

collateralized

financing

arrangements

recognized

on an accrual

basis

Stock-Based

Incentive accounts

Compensationfor

The Companymeasuresgrant datefair Is

stock-based services

compensationreceivedIs

in

accordance

wW

ASC 718during

whIchthe

the cost of value

employeeof theto

for

stock-based over the

compensationthe period

based on which an

award

That costin

recognizedfor

employee Income

required

provide

service

exchange

award

TaxesIs

The CompanyFederal sharing

Included

in

the consolidated

federal

and state incomeseparate return

tax returns

of

Holdingsto

and state Income taxes are determined on agreementliability

basis pursuant

tax

between

the

Companythis

and

Holdingsdeterredliabilities

The

Company accountsfor

for

income

taxes

under thefinancial

method

Under

method

taxes are provided

differences

betweentax

reportingwill

and tax bases of assets andin

and

areto

measured reverse

using the

enacted

rates

that

be

effect

whenUnder

these

differences

are

expected

Securities

Purchased

Agreements

to Resell

and

Securities

Sold Under Agreements toare generallycertain

RepurchaseTransactions

invoMng

resale

agreementsTransactions

or repurchase cleared through

as

collateralized

financings

agreements FICC and under

accountedresale

for

non-FICC

and

repurchase agreementsare reported

with theIn

same

counterparty with

executed

master netting agreement

on

net basis

accordance

ASC

210-20

Collateralized financing the

arrangements used andliquidity

In

connection

with proprietary

trading

activities

expose

Company

to

issuer defaultcollateralized

risk

To the extent the Companywith counterpartyright to

has financedfor

position of

through

financing

arrangementgenerally

example by meansthe

repurchase transaction

the counterparty

has the

requirecalls for

Companyfrom

at

to meet margin any time during the term of the repurchase agreement decreases in the market value of the collateral that the Company posts

resulting

financingfor

Accordingly

repurchase agreements because the value of theIf

and

other

similarfinancing underlying

fools

create

liquidity

risk

the

Companywhetherto the

collateral

the repurchaseIssuer-specific

agreement concernsit

decreases

becausecollateral the value defaults value

of

market conditions

or

becauseto

there are

with respect

the

Companycollateral

will

be required

post additional impaired

margin which for exampletoIf

maythe

not readily

have

If

of the

becamethe

permanently

the issuer of thecollateral to

collateralfull

on

its

obligations

Company

would

be required

repurchase the

at

uponcould

the expiration

of the repurchase

agreement

causing

Company

recognize

loss

which

be

significant

Certain or salesfair

of the of

Companys purchasesresult

of

securities

under agreements

to

resell

resale agreementsat

securities

under agreementsof the

to repurchasefair

valuefor

as those

Companysrepurchase

value

repurchase agreements are carried election The Company elects the fair value

option

resale date

and

open

settlement

or that are not

agreements that do not settle overnight or do not have an accounted for as purchase and sale agreements such as

repo-to-maturity instrumentsto

transactions

more accurately

The Company has elected the fair value option for these reflect market and economic events in Its earnings and to mitigate

MF GobaI IncNotesto Statement of Financial

Condition

March

31

2011

potential

Imbalancecarrying

in

earningsfor certain

causedassets

by using

different

measurement

attributes

La

fair

value

versus

value

and

liabilities

From time

to

time the Company

enters

Into

securities financing maturityin

transactions

which

mature on thefor these assets

same

date

as the underlying

col%ateras

stated

The Company accounts

transactions forward salefair

under the prescribed commitment

guidance

Included

ASC 860of

as

sale

of

financial

and

purchase

or conversely purchase

as

purchasesale

financial

assets

andat

forward estimated

commitmentvalue

The

forwardfor

and forward under

commitments

are valued

and

are

accounted

as derivatives

ASC 815

Restricted

Cash and SegregatedIs

Securities

The Companyaside

obligated

by rules mandatedto satisfy

by

Its

primary

regulators

the

SEC and CFTCcustomer

to

set

cash or

qualified

securities

regulations assets

promulgated including

to protect

assets

At

March

312011

the

Company has

segregatedto

cash

securities

owned and

securities

purchased

under agreements

resell

as follows

Cash

at

banks purchased owned under agreementsto resell

729021200 8638208100 279590500 9646819800

Securities Securities

Resale agreements

in

segregation

include

$2629441900

from

MFGHowned

Ltd

At MarchdeposIted

312011

$150366900

of

U.S government

securities

by the

Company

are

as margin with clearing

organizations

ReceivablesReceivables

From and Payablesfrom

to

Customers and

Non-Customersarising in

and

payebles

to

customers and

non-customers

connection

with futures

and

securities transactions futures contracts

Include

cash margin deposits

and gains and

losses

on open

commodity

from customers and

non-customers

Customerare held

and

non-customer owned ascollateral

securitiesfor

consisting

primarily

of

U.S Government

securities

by the Company

receivables

from customers and non-customers andsecurities held

as

margin deposits amounting andto

for trading

Customer and

and

non-customer ownedrespectively

by the Companyof

$570482300optionsreflected

$223887400positions

andto

the net short value

customers

non-customersare not of

on futures

amountingoffinancial

$154595400collateral

and

$13810800securities organizations held

respectivelyIn

on the statement has beento

condition

portIon

of these

the

amount

$187355000In

deposited

as margin

with clearing

and

carrying

brokersof

addition

non-customer ownedas collateral

securities the

Company

also

$223632400Securities Securities Securities lender otherin

warehouse

receipts

Borrowed borrowed borrowed

and and

Loanedloaned require transactions the the are reportedto

securities

as

collateralized

flnancings with the oris

transactions

Company Company

deposit

cash or othercollateralin

collateral

securities loaned

transactionsof

receives

the

form of cashtransactions

collateralin

The

fair

value

the

collateral

in securities

borrowed and

and loaned on

generally additionalcollateral

excess

of the

market valueor

of securities

borrowed

loaned

daily

basis withof

collateral

obtainedin securities

receIveddaily

the market value refunded as necessary As of March 31 2011 The collateral is borrowed transactions was $7071826800 requIre counterpartiesto

valuedcollateral

and

the

Company maytransactions

deposit

additional

collateral collateral

or return pledged

pledged

as appropriate

As of March

31 2011

the

market value

of

under securities loaned

was $6007400700

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

In

accordance

with

ASC 860offinancial

at

March

31 2011In

the

Companyof

de-recognized

assetsto

and

liabilities

from

the statement against

condition

the

amount

$5292048000

related

securities

borrowed

securities

pledged with the same counterparty

CollateralAll

assets the

the

Companyparty

has pledged cannotsell

as

collateral

in

secured

borrowings

and

other

arrangements

when

securedof

or repiedge

the assets are reflected

on the Companys

statement

financial

condition

MembershipsExchange Impairmentvaluein

In

ExchangesusedIn

membershipsvalueIs

the

Companys

operationsto

are reflected

at cost

orat

if

an

determined by management

be other than

temporarythe to

an adjusted

that reflects nanagements estimate of the Impairment loss of $521000 2011 the Company recorded an Impairment The Impairment Is the resutt of sustained market values below

Duling related

year ended March venous membershipsvalue of the

31

the carrying

seats

Furniture EquipmentFurniture using the over

and Leaseholdare depreciated

Improvementsovertheir

and

equipment

estimated

useful

lives

of three

to

fIve

years basis

straight-line

methodeconomic

Leaseholdusefullife

improvementsof the

are amortized or the

on

straight-line

the lesser

of the

Improvement

term of the related

lease

Intangible Intangible

Assetsassets representprimarily

the

cash paid

in

business

combination are

for

customer onat straight-

relationshipsline

technologytheir

assets

and trade namesof 3.5to

Intangible

assets

amortized are reviewed

basis

overfor

estimated

lives

10

years

Intangible

assets

least

annually

Impairment or when eventsnot

or

amount

may

be recoverable

During

Indicate that the carrying changes in circumstances March 312011 the Company recorded the year ended trade

an Impairment loss of $742900 related

to

managements On November $2532700relationships

decision

to discontinue

the

names The impairment is the use of the trade name purchasedresearch

result

of

2O1O

the

Companyfair

purchasedof the

group

for

cash paymentrepresenting usefulUfe

of

The

estimated

value

intangible

assets over

acquiredtheir

customerof 3.5

was $2027500

and

are being

amortized

estimated

years

GoodwillGoodwill represents the

excess

of the purchase

price

of

business

acquisition

over

the

fair

value

of the net assets

acquiredto

During

the yarorided

March

312011

earnoutfor

payments Marchthe

totaling

$3606500purchase

related

prior

acquisition capitalized relatedto to

consideration recorded

and

were made and were accounted goodwill During the year ended purchaseof research

as additional

31 2011of

the

Company $304300Goodwill

goodwill

the

group

In

amount

Is

not amortized during

and

the

Companysof

single

reporting

unit

Is

testedis

at least annuallytriggering

forIf

impairment review

the fourthfair of

quarter value theto

each

fiscalis

year orits

whenthe

there

event beofIts

the

indIcates the assets

that thefair

of goodwill

below

carrying

value

and

will

not

recoverableindIvidual

value

Companycalculate

Is

compared amount

to of

aggregatedif

fair

values

and

liabilities

the

estImated

based

on discountedrecorded recordedrelated

2011

the

Companythetotal

represents business

environment

the year ended March 31 cash flows and which an impairment loss of $3810800 related to goodwill The impairment Is the result of an overall decline In the goodwill to the acquired business

impairment market values During

any

Fair value

is

MF GobaINotes

Incof Financial

to Statement

Condition

March

31

2011

Translation

of Foreign Cunencyliabilities

Assets andprevailing

denominatedof

In

foreign

currencies

are translated

at

spot

exchange

rates

at the close

business

on the

reporting

date

Receivables

from and

Payabtes

to

Brokers

Dealers and

Clearing

Organizations

Amountsconsist

due from

and due

to

brokers

dealers

and

clearing

organizations

at

March

31 2011

of the following

Due FromReceivablesSecurities

Due To8.429000

from and

payables

to

brokers

and dealers

1534360500 219149300 126984700 1880494500

failed

to delIver/receive payablesto

199019800 145584200 353033000third

Receivables

from and

deaiing

orgaruatlons

Receivables

and

payables unsettled

from

brokers fee

and dealers Include amounts and

due

from/to

parties

for

margin deposits

trades

rebates executiondeposits

deaiing organizations Payablesto

include

margin

and

brokerage fees Receivables net receivables from unsettled tradesfees

from

dearing

organizations

Include transaction

and

net

payables

for

unsettled

trades

SecuritIes

Purchased

Under

Agreements

to

RussO

and

Securities

Sold Under Agreements to

Repurchase

It

is

the policy of the 31

of theprincipal

Company

to

obtain

possession resale

of

collateral

with

market valuecounterparty

equal basis

to

or of

in

excess March

amount loaned market value

under

agreementsreceived

on

As

2011

the

of gross of

collateral

under reversewith

repurchaseclearingto

agreementsorganizations deposit

was $49689180600ThecollateralIs

which $110499100daily

was pledged

valued

and

the

Company may

require

counterparties of

additional

collateral

or return

collateral

pledged

as appropriate

As

March

31 2011

the

market valuediscussedIn

of gross

collateral

pledged

under repurchase amountsreceived

agreements have been

was $55079480000againstcollateral

As

Note

certaIn

collateral

offset

pledged

As

of

March

31 2011for

the

Company

had

resaleclassified

agreementswithin

of

$5015254800cash andbasisIn

which

Include

the

impact

of netting

resale

agreements

restricted

segregated

securities offair

Restrictedfinancial

cash and

segregated Certain

securities

are presented resale

on

gross

the statement

conditionresult

of the

Companysfair

value resale

as and

of the

Companysagreements

value

and repurchase agreements are carried at At March election 31 2011 the fair value of these and $3439212600respectively

repurchase

was $7639105800

In

accordance

with

ASC 860of financial

at

March

31 2011related to

theto

Company when

de-recognized

assets

and

ilabllltles to resell

from

the statement securities soldis

condition

securities

purchasedthe maturity

under agreementsdate

and

under

agreementsthe maturity with

repurchaseof

of the underlying Including

collateral

the

same as

date

the

resell

or repurchase with

agreement

repurchase agreements

an

affiliate

that

were

collateralized that

Note

11

For these from

specific

repurchase offinancial

transactions conditioncollateral Italy faIr

debt European Sovereign for as sales and are accounted are retaIns the

derisk

recognized of default

the statementof

the

Company

exposure Thefor

to

the

of the Issuer sovereign

the underlying of the

assets comprising BelgIumthis

U.S governmentandIs

securities or forward as

Europeanrepurchase derivative

debt consistingrepresents

Spainvalue ofto

Portugal

Ireland

commitment

exposureto

and

accounted

The

value

of the derivative

is

subject

mark

market movements

which

may cause

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

volatilIty

In

the

Companyswill

financial

results

until

maturity

of the underlying

collateral

at

which point

these

instruments

be redeemed

at

par

Amounts

derecognized

as

result

of these

transactions

are

as follows

Contract ValueSecurities SecuritiesIncludop

purchasedsold

under

agreementsto with

to

resell

418523800 14380145100debt and transactedwith

under agreementscdLereiLzed

repurchaseEuropean Sovereign an affl9e

$7

7154700

Market ValueSeczrltles SecuritiesIncludes

ownedsoldnot yetof

14316892700purchasedEuropean

417277800debt lraieactedwIth

$7433423700

Screlgn

an

aIf$bte

Theand

fair

value

of the forward lossis

repurchase

commitments

resulting

from the application

of

ASC

860

the associated

immaterial

as 0f March

312011

Securities

Owned

and

Securities

Sold Not Yet Purchasednot yet

Securities

owned and

securities

sold

purchased

at

March

312011

consist

of

SecuritIes Securities

Sold Not YetPurchased

OwnedU.S governmentCorporate debt securitiessecurities

4457015800 514415500 278833700 5250064800

4332590100 255809300 289208800 4877608200

Other

At March

31 2011 noexcept

securities

owned byIn

the

Company

are deposited

as margin with clearing

organizations

as disclosed

Note

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

income

Taxes

The Companyseparate

files

consolidatedIn

federathe states

stateIn

andit

local

income

tax returns

with Holdings

or

Income tax returns

which

solely

does business

The components

of the deferred

tax assets

and

liabilities

at

March

31 2011

are

as follows

Deferred tax assetsIncentive Intangibles

compensation

13251700 40862900 4715700 9860000 1138300 3098200 72128800

Accrued

expenseslosses

Net operatingDepreciation

Bad

debts

Deferred tax OtherDeferred tax

liabilities

13500assets nettax assetsIs

72713300dependent uponmultiple variables of current tncluding available loss

Realization

of deferred future

carrybacksplanning valuation

taxable

income

projectionsthat

the reversal theits

temporary

differencesfor

and

tax

strategies allowance

U.S

GMP requiresall

Company

continually

assess the need

against

or

portion

of

deferred

tax

assets

The Companyloss positionis

is

in

three-year

cumulative evidence the weight

pre-taxIn

loss

position

at

March

31 2011of deferredis

cumulative tax

considered

negativethat

assessingthis

the

realizability

assets

The Companysignificant

has concludedloss costs

given

negative

evidence the

diminished three

due to

non-recurring

and

expenseto

items recognized unprofitable to the

during businessthisIs

prior

asset Impairments concludedpositive taxthat

andIs

related

exiting

lines negative

The CompanyevidencerealizeIts

years Including has also

there

sufficient

positive

evidence

overcome

Thedeferred

evidence

Includesfirst

three

means by whichofexisting

Company

able to

fully

assets

The

is

the reversal

taxableIn

temporaryforward

differences period

Companythat future

forecasts

sufficient

taxable

Incomerelied

the carry

Second The Companyis

the believes

projections

of

incomeIt

can be

upon

because the income

forecasted

based

on

In fiscal 2011 Most notable in this regard began to see evidenced key drivers of profitability that to the significant are plans and assumptions relating changes to the Companys compensation

structure conditions

implementedThird

in

fiscal

2011its

Increased

trading

volumes

and

other

macrn-economicstrategies

in certain shifts

ofin

key operating

jurisdictions

the Parent permitis

has tax planninguthization

which

include

potential

Investment

policies

which shouldthis

of the

Companys The amountreduced weretoin

net operating

losses

Management

believes

strategy

prudent

and

feasible

of the deferred the nearit

tax asset considered the

realizableresults

howeversignificantly

could

be

significantly

term

if

Companys

actual

are

less thanIn Its

forecast valuation

If

this

is likely that the Company occur allowance Loss carryforwards gMng rise

wouldto

record

materialoverall

increase

portion

of the

net deferred

tax asset either

do

not expire

or expire

no

earlier

than

fiscal

2031 FASBthe

The CompanyIn

follows

ASC 740of

formerly

interpretation

No 48gross

Accounting

for

Uncertainty of

Income Taxes

As

March

31 2011

Company has

unrecognized

tax benefits

$1799000

10

MF Goba1 IncNotes to Statementof Financial

Condition

March

31

2011

The Company hadunrecognized

approximately at

tax benefits

March

$451000 accrued 31 2011would

for

the estimated

Interest

and

penalties

on

The

total

gross

unrecognizedIn

tax benefitsIt is

if

recognized

affect

the

Companyswill

effective in

Income tax ratenext twelve

future

periods

expected asthis

that unrecognizedresult

tax benefits statutessignificant

decreaseor

the

months

by an Immaterial

amount

of expiringto

of

limitations

sethementsof operations

The Companyorfinancial

does not expectof the

change

have

impact on the

results

position

Companyamountof unrecognized tax benefitsis

reconciliation

of the beginning

and

ending

as follows

BalanceAdditions

at

April

2010taken during the current period

3537000 307000

based on tax positionsofprior

Release

period

positions

Settlements

1638000 4070001799000

Balance

at

March

31

2011

In to

many casesexamination

the

Companys

uncertain

tax positions

are related

to

tax

years that remain subject

open

by the relevant tax authorities which tax year is 2004 for certain states In the United

vary by States

jurisdiction

The Companys

earliest

Leases

The Company wherebythe

enters

Into

renewableto

one

year operating

leaseto

agreements Finance

withfor

MFGuse of

Financefurniture

Company agrees

make

monthly

payments

MFG

and

equipment

The Companyunaffiliated

also

leasesforIts

certain

office

premises equipment

and

computerannual

hardwarerental

from

parties

own use

At

March

31 2011are

the

minimum

commitments

under non-cancelable

leases

for office

premises

FIscal

Year

Ended March

31

CommItments 8993700 7979900 8962600 9020900 9168800 42632000

2012 2013 2014 2015 2018Thereafter Total

86757900the

At

March

31 2011

Companyto

had

$2000000ofits

letter

of

credit

secured

by firm owned

U.S

government

secuiitles

guarantee one

leases

Segregation

of

Fundsunder the CommodItyto

The

Company

is

required

Exchangeassetsat

Act

and

under Rule 15c3-3 of theto

Securities

Exchange

Act of 1934

segregate

least equivalent

balances

due

to

customers trading

on domestic and foreign futures

and

securities

markets

11

MF

Global

Incof Financial

Notes to Statment March 31 2011

Condition

At Marchincluded

31 2011

assets segregated offinancial

or held condition

in

separate

accounts

under applicable

regulations

on the statement

are as follows

Pursuant to Commodity Cash at

Exchange Act 220403000

BanksClearing Securities organizations

28279400under resale agreementsat

owned and

receivables

BanksCleaiing organizations

4403128500 3588977500net

Due

to

exchangeTotal of

dearing organizationssegregated assets

71878500

Iriduded

on the statement

___________8168909900

financial

condition

Items

not recorded of of

on the statementsecurities

of

financial

condition

Market value Market valueTotal

owned

by customers ownedby

443931300

commodity

options

customers net

1535741008457267100

segregated

assets

Foreign secured Cashat

assets related

to

foreign

futures

activities

banks ownedbrokers Total of

32774700andreceivables

Securities

under resale agreements

at

banksnet

269070000 960512900

Due from

including

receivables assets

under resale agreementsincluded

foreignfinancial

secured conditIon

on

the statement

1282357600

Items

not recorded

on the statement

of by

financial

condition

Note 126551100

Market value of securities owned Market valueof

customers owned by customers net

commodity

options

10213001387887400 9845154500

Total

foreign

secured

assets

Total

segregated

and

foreign

secured

assets

Pursuant to Securities

Exchange Act requirements 472724000

Cash

at

bank

At

March

31 2011assets

theIn

Companyof

Is

in

compliance dueto

with these

segregation

requirements

and

holds

segregated

excess

amounts

customers

Securities of the

purchasedtotaled

CFTC

$8638208

under agreements to resell that are subject to the segregation 100 at March 31 2011 and are included in restricted on the statementoffinancial

requirements

cash and

segregated

securitIes

condition

Fair

Value

Measurements

and

Derivative

Activity

The Company hasquality

frameworkto

for

measuringvalue

fair

value

and

fair

value

hIerarchy

based on thefor fair

of inputs

used

measure

fair

which enhances

disclosure

requirements

value

12

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

measurementsInputsalt

The Companythe

utilizes

valuation

techniques

that

maximize the use of observableappliedthis

and

minimize

usethat

of

unobservableto

inputs

Theat

Company hasfair

framework

to

financial

instruments

are required

be reported

value

The Company considers own credit spreads whenSecurities

the impact

of counterpartyfair

credit

risk

in

the valuation

of

its

assets

and

its

measuring the

value

of

liabilities

owned

securities

repurchase agreement value

certain

sold not yet purchased certain resale agreements certain borrowed and derivative transactions are canled securitiesof the valuation are techniques atfair

at fair

The

following of assets

is

descriptionliabilities

the

Companyrecurring

applies basis

to

the

major

categories

and

that

measured

value

on

U.S

Treasury

securities

are

marked from compositesare generally categorized

of end-of-dayIn

quotedfair

prices value hierarchy

Accordingly

these

securities

Level

of the

Equities

Include

mostly exchange-traded Accordingly these

corporatesecurities

equity securities are categorized

and

are valued of the

based onfair

quoted

market prices

in

Level

value

hierarchy

Exchangeradedvaluedfair

or

listed

derivative

contracts

the

Company

carries are

actively in

traded Level

andof the

based on the quotedhierarchy

market prices

Accordingly

they are categorized

value

u.s agencyprices

debentures

are generally or dealer

valuedIf

based on the compositesapplicable

of

end-of-day

trade

or executablepricing

bicker

quotes

Otherwise they are priced fromcategorizedin

independentthefair

sources

U.S agency

debentures

are generally

Level

of

value

hierarchy

Mortgage-backedliquid private-label

securities residential

primarily

consist

of

U.S governmentandpricing

mortgage

pass-throughs mortgagecategorizedin

mortgage-backedpriced from

securities

collateralized

obligations Level

Theyfair

are generally value

independent

sources and

of the

hIerarchy

Corporate

debt estImated

securities

consist

primarily

of

U.S

corporate orfor

bonds

The

fair

value

of corporate

bonds

is

using recentlypricing

executed

transactions

market quotedvaluation

prices

where bonds are

observablegenerally

IndependentIn

sources are also usedof thefair

Corporate

categorized

Level

value

hierarchy

Certain

resale

and

repurchase are generally

These and

transactions

agreements are carried at fair value under the fair value option valued based on Inputs with reasonable price transparencyIn

are therefore

generally

categorized

Level

of

the

fair

value

hierarchy

Sharesavailable

held

due

to

demub.ralization

of

exchanges

are priced

based

on thein

latest

market datashares held at

typically

the

most recent bids or transactions

completed

certain

cases

due to demutualization of exchanges are priced using models with inputs that are observable these securities are categorized as Level valuation When model Input prices are observable

WhereLevel

there

is

limited fair

trading

activity

for

these

Instruments

these

securities are categorized

as

of the

value

hierarchy

13

MF

Global

Incof Financial

Notes March

to Statement

Condition

31

2011

The

followinglevel

tablewithin

summarizesthefair

the

Companys

financial

assets

and

liabilities

as of March

31

2011 by

value

hierarchy

impact Level Level Level NettIng

of Total

MeetsRestrictedsecurities

cash

and

segregated

U.S

government agency debt

securities

and

federal

obigatlonasecurities

220124500

44894000 14572000

255.018500 14572000

Corporals Secudties agreements Totalrestricted

purchasedto resell

under

1408209900

1.408209900

cashsecurities

and 220124500 1487675900 1687.800400

segregated Securities

ovmedsecurities

U.S

government

and

federalagency

debentures

3104453100

348934200 1003628300 10411000 1003628300

U.S

governmentsecurities

mortgage

backed

Piie labelsacajiltise

moitg.ge.backed

10411000 504004500 193402590 54553200 28097200

Corporate Equities Equity Options Shares Total

debt

securities

504004600 193402600 54563200 28097200 1206200 3.381712200 1079200 1868057200 296400 296400

options on heldfutures In

exchanges

2.580800 5250.064800

securities

nemed

SecurIties

purchased

under

enremantsbreseluaRocelvablea-affjlates3

17521632300 1.009409000 $3601836709

9882526500

7839105800 1009409000$16696380000

Total

assets

at

value

$21

866774400

$96400

$9852523500

Usbifitles Securities sold notyet

purchased and

U.S

government agency

securities

federal

debentures mortgage-

$3297000700

74274500

3371275.200

U.S

governmentsecurities

backed Corporate EquitIes

961314900 255800300 226845900 38541200 23821700not yet

981314900 255.809300 226645900 38541200 23821700

debt

securities

Equityoptiona Options on Total securities purchasedfutures

add

3586209500

1291398700

4877606200

Securities agreements

Sold underto

rec3wthase

13321739100 $3566209500

9882526500

3439212.600

Telal

liabtttlea

at

far value

$14813137800

988252B500In

$8311820800

Represents Excludes

the tnpectresale arid

of

netting

certain

resale

and

repurchaseat

agreements value

accordance

with

ASC 210-20

repurchase purchased

agreements under

that

are held

contract

Representsaffiliates

securitIes

agreements

to resell

with

affliates

held

at

falr

value

Excludes

agreements

with

held

at

contract

veuawith cost of

DurIng

the year

4000

sharei

$488000

were

transferred

from

acchange

memberships

to

securities

owned

The

falrvalueof

thesesharee

was $1206000at

March

312011

14

MF

Global

Incof Financial

Notes

to Statement

Condition

March

31

2011

The

table

below

provides

reconciliation

of the beginningat fair

and

ending

balances

for

the

major Level

classes

of assets

and

liabilities

measured

value

using

significant

unobservable

inputs

Fair

Value

Measurements

Using

Significant

Unobservable

Inputs

Level

BalanceTotal

as of

April

12010unrealized gains

293600 lossesnet

realized

and

1800

PurchasesTransfers

andIn

sales netof Level

out

BatanceasofMarch3l2011

____________the

For the year or Level

endedIn

Marchfair

31 2011hierarchy

Company

did not

have

transfers

in

or out of Level

Level

the

value

The Companyinterest

rates

may use derivative The Company alsoare

contracts transects

for in

purposesderivative

of mitigating contracts

its

exposureproprietary

to

fluctuation

in

on

basis The

derivative

contracts

marked

to

market based upon

quoted

market prices

Theon

following gross

table

summarizes

the

fair

value

of the

Companys

derivative

contracts

by major type

basis

as of March

31 2011Derivative Assets Derivative

NumberContiacts

of

Uabltles

Derivative

contrtsoptions

tortrsdbig

activities

Equity

54553200 28097200contractsfor trading

38541200 23821700 62362900

655472 21781 077253

CycpionsTeedfair

yatie of derivethe

sctlvWee

82650400 condJonof financial

Recorded

In

Securfiles

onmdsold

on

the statamet

of financial

ReCOrded

In

Securities

nat yet purchased

on the statement

condition

As

of

March

31 2011

the

Companys volumegain orlossis

of

exchangedaily

traded

futures

executed

and

or

cleared associated

where the unrealizedwith the contract clearing

settled

andare

thereprimarily

no receivablecleared

or payable

was 21428

These

contracts

through

commodity

corporations

Derivative

financial in

Instruments orvolatility

Involve of or

varying rates

degreesforeign

of off-balance

sheet or

market risk whereby market values whichof the

changesunderlying the

the

level

interest

exchangeIn

rates

financial

instruments

commodities mayoffinancial

result

cash settlements The Companythat

may exceedin in

amountsto

recognized

on the statement

condition

place doing

mitigate

market risk although

there

can

be no assurance

they

will

has procedures in fact succeed

soPlans

10

Benefit

During

the

year

eligible

employees

of the

Companyto

were covered

by Holdings tocertain

401k

plan

Theset

Companyforthin

matches

employees

contributions

the

401k

plan subject

limitations

the

401k

plans agreement

15

MF

Global

Incof Financial

Notes to Statement

Condition

March 31 2011

11

Affiliate

Transactions

MFGHcaptive

Ltd providesinsurance

non-property

insurance

coverage

to to

the the

company

Premiums

are allocated

Company underwritten by an Company based on actuarial

affiliated

calculations

MFGHthe

Ltd charges the Company fee use of the MF Global trade name

for

the services

of executive

management and

royalty

for

Holdings notlimited

provides

certain

administrative

services

to

the

Company

These

services

include

but arefor

to

payroll In

and

human

resources

processing

The Companyincur various

reimburses Holdings

these

services

additionto

MFGH

Ltd and Holdings

costs including

Insurance

which are allocated

and

reimbursed

by the Company

The

Company earnsfor

portion

of

its

commission

revenueIs

by executing

and

clearingaffiliates

brokeragefor

transactions transactions

various

affiliates

The Company by those

also

charged

by various

executed

and cleared

affiliates

on behalf of the Company

MFGmargin

Finance

provides

financingof

loans

to

certain the

customers

of theof

Company

primarily

for

meeting by

variations

As

March

31 2011

total

amount

outstanding

financing

provided

MFG

Finance

is

$52090100withto

The Company customerscontractsto

has an agreement

MF

Global or

UKsell

Limited

MFG UKMetals

an

affiliate

to introduce

MFG UK who

desire

purchase

London

Forsuth

contracts

the counterparties

arecustomers ofshare

MF

Exchange UKwlth

futures

and

options ofin

noobflgatlon

performancethe

by the Companyfrom such

The Company

receives

of the

Net

Profits

as defined

agreement

transactions

The

Company

entered

into

repurchase

agreementsidentified

with

an

affiliate

that are

coilateratized

with the default

Europeancollateral liquidity

Sovereign associated

debt

The

affiliate

the

market opportunitythe

and

managesaffiliate

with these services

transactions the

although paid

Company

retains the issuer feeto

and

risk

For these

Companyagreements

management

the

The

managementfrom entering

fee representsinto

approximately

80%

of the trade date

gain recognized

by the

Company

these

repurchase

Certain condition the

balances

included

in

receivable netin

from

and payablewithto

to

affiliates

on the statementIs

of

financial

have

been

recorded

accordance and

ASC 210-20affiliates

The following

schedule

of

components

of the receivable

from

payable

ReceivablesSecurities Futures

net

Payables

net

purchased

under

agreements

to

resell

4190677400

254556001535606500

transactions loaned transactionsindirect

12005088700expenses

Securities Securities Direct

2218320039651600allocated

and

169500 4195914400

21516001525467700

12

Net Capital

Requirement

The Companybroker-dealercapital

Is

subjectis

to

the

SECs

Uniform

Net Capital Rule commissionunder

rRule

15c3-flto

which requiresadjusted net or

thatto

also registered the greater

asof

futuresits

merchantparagraph

maintain

equal

or

above

requirement

a1li of

Rule 15c3-1

16

MF

Global

Incof Financial

Notes March

to Statement

Condition

31

2011

the aggregate

of

8% of

customer

maintenanceAt

margin

requirements

and

8% of

non-customer defined ofto

maintenance

margin requirements

Marchin

31 2011 MFGI had

net capitalcapital

as

$562882400maintained

which was $125710300

excess of the minimum

reqUired

be

The Company

Is

subject regarding

to

certain

notification to

and

other

provisions

of the net

capItal

rules of the dividend with

CFTCall

and

SECand

advances

affiliates

repayments

0f subordinated the

liabilitiesin

paymentsofIts

other

equity withdrawals

At March

31 2011

Company was

compliance

applicable

requirements

13

SubordInated

Borrowingthe balance includes of subordinated notes

At March

31 2011

total

due to Holdings

and

MF

Global

Finance

USA

Inc

MFG

Finance

Lender

Amount 130000000 50000000 37500000O565.000000

Maturity

Holdings

1-3 years

MFG MFG

Finance Finance

Lessthanlyear1-3 years

The

subordinated

notes

carry

Interest

at rates balance

agreed

to

between the lender and the Companyrate

from

time to timeeffective

based

upon

the unpaid note

at the at

30-day LIBOR

plus

500 upon

basIs points

The

interest

rate

on each and

was 5.26%the

March

31 2011net capital

Based

agreementstheto

approvedsubordinated maturity

by

the

CMEis

CBOEIn effect

Cornpanys

designated

self-regulatory organizations This debt

debtif

available giving

computingto

regulatory the

may be repaId pnorregulatory netcapital

only

after

such payment

Company

meets

its

requirements

During

the

year-ended Marchnotes

31 2011in

the

subordInated

as reflected

the schedule

Company extended aboveRisk and

the maturity

of certain

14

FInancial

Instruments

with

Off-Balance Sheet

Concentrations

of Credit

Risk

The CompanyIncluding

is

exposedor

to

wide vanety

of

risks which

are Inherent

In

Its

business

and

activities in

volumespressure

In

margin pressure that could be brought about by general decline the markets and products in which offers execution and clearing servIces volumeit

margin

due

to

market conditionscompetitorsin interest

diminishing applying

client

franchiseIn

due

to

either

disintermediation

by exchange

or other

Innovations

technology

macro-economIc

changes

such as movements commodity any of thesepricesrisks

ratesin

currency

andcould

changesaffect

issuer default or exchange rates security instrument and market correlations Long-term exposurefinancial

to

not only

performance

but also the

Companys

reputation

The Companyinvestments proprietaryactivities

Is

exposed

to

market risk dueforits

to

the inventory

of securities positionsfacilitation InIts

andactivities

the

Companyandis

holds

market

making

and

client

principal

actMties the

other investments

and treasurytrading

operations

day

to

day businesswithIn

Companywhich

engaged

in

various

brokerage

and

investingfinancial

activities

counterparties event

primarily

includetheir

broker-dealers obligations the

banks and other

institutions to risk

the

counterparties

do not

fulfill

Companyand

may be exposedconcentration

of default

The Company

manages

these

exposures by

limiting

the size

of positions

17

MF

Global

Incof Financial

Notes to Statement

Condition

March

31

2011

Market

Risk

in Interest The Companys market risks include exposure to movements rates currency credit issuer risk including changing rates security and commodity prices yield curves

exchange spreadsvolathltles

changes

in

ratings

and the

possibility

of issuer

defaults

mortgage

spreads and

implied

Interest financial

rate

risk

arises

from the the

possibility

that

changes

In

interestis

rates

will affect

the value raterisk

of

instruments debt

that

Company

holds

The Company

exposed

to

interest

on the

subordinatedin

that

the

Company owes

client

cash and margin

balances

and

positions

carried

fixed

exposed

Income securities equity securities options and futures rate risk in its own proprietary and principal to Interest Changesin interest Interest

The Companyactivities

may

also

be

as well asinterest

asuryIncome

operationsrelative

rates

can adversely

change

the

Companys

to the

Companysarises from

expenses

Currencyvalue of

risk

the

possibility

that

fluctuations of the

In

foreign

exchangelocated

rates

will

impact the

financial Is

instruments

and the valueforeign

CompanysIts

assets

outsideprincipal

of the

U.Sand meet

The Companyalso

exposed

to

exchangepart of

rates fromIts

proprietaryliabilities

and

activities to

because

the

Company must keepobligations

assets

and

in

foreign

currencies

operational

and

regulatory

Equity value

price

risk

arises

from the

possibility

that equity securitythat

prices value

will

fluctuate

affecting

the

of equity

securities

andor

other Instriments stock Index

derive

their Is

fromequity

particular

stockprimarilyin

defined

basket of stocks

The Company purchased

subjectIs

to

price

risk

securitiesclient

owned andor

securities

sold

not yet

which

faciNtatlonits

market makingacross

activities different

The Companyoptions futures

attempts

consequence to limit such

of proprietaryrisks

by and

diversifying

portfolio

many

and

underlying securIty

securities

avoiding

concentrations

of positions

based on the same underlying

Commodityvalue

price

risk

arises fromdirectly

the

possibility linked

that

commodity

prices

will

fluctuate

affecting

the

of instrumentsIs

orto

indirectly

to the price of the underlying through priceits

commoditythe metals

Thearid

Companymarketsproprietary

directly

exposed

commodityto

prices

transactions also

in

energyof

The Companys exposureclient facilitation

commodity

risk

may

be the consequence

or

market making

activities

Issuer

defaultcollateral

risk

arises

when an

issuer of the impaired

collateral

defaults loss For

on

its

obligations the

This could enters

causeInto

to

be permanently

causing

example

Company

and are repurchase transactions which mature on the same date as the underlying collateral in accordance with the accounting standard for transfers accounted for as sales and purchases the collateral and servicing In these transactions the Company would be required to repurchaseat the contracted the value of the repurchasecoliateral for price loss

upon and

the expiration

of

the

agreementfor

it

there

is

impairment

In

may be recognizedpurchases

Mdltionally

resale

and

repurchase repurchase or

transactions forward

accounted

as salesin

the

Company

recordsfor

forward

resale

commitmentfor

accordance

with the accounting

standardis

transfersto

andto

servicing

which

is

accounted

as

derivativevolatilitywill

The valuein

of the derivativefinancialis

subject

mark

marketof the

movements which may causeunderlying underlyingcollateral

the

Companys

results

until

maturity

and which

not

be realized

unless there

default

of the issuer of the

securities

Also under our repurchase sales our counterpartlessecuring ourability to

agreements

includingto

those

repurchase margin duringliquidity

agreementsat

accounted

for

as

may

require

us

post

additional collateral

any time as

means forthe value of

repurchase

the underlying

the termrisk for

of the repurchaseif

agreement

Accordingly

repurchase

agreements

create

us because

18

MF

Global

Incof Financial Condition

Notes March

to Statement

31

2011

the

collateral

underlying

the repurchase there areto

agreement

decreases

whetherto

because

of

marketthe

conditions

orwill

because

Issuer-specific additlonl

concerns

with respect

the coIIatera

Companythe value defaults

be requiredcollateral

post

margin which the CompanyImpaired

maythe

not

ediIyof the

havcollateral

of the

becametheprice

permanently

for exampleto

If

the issuer

on

Its

obligations

Company would bethe expiration

required

repurchase

collateral

at the

contracted-for recognize

purchaseloss

upon

of the repurchase

agreement

causing

us to

Credit

Risk

Credit client broker from

risk

is

the

potential

for

loss related

to

the default Creditrisk

or deterioration derives from

of the

credit

quality

of

counterparty

or issuer

of securities

assets

placed

with

banksrisk

dealers clearing

organizations

and

other

financial

institutions

Mdltlonaily

credit

arises

repurchase and resale transactions other brokers and dealers The Companyexecution

securities

borrowed

and

loaned andprincipalit

receivablesIn

from

acts

as both

an agent and which exposes

providing

and

clearing

services

for

listed

transactions

to credit rlsk

Thethe

Company Company

is

exposedtheir

to

losses

whenIs

clients

are not able or tosatisfy

willing deficit

to

meet

their

obligations

to

and

posted

margin

insufficient

the

The Companysthe poesIlfty

default

risks

Include both counterparty

pre-settlement default

and settlementthe

risk

Pre-settlement could Incur theto

risk

is

that should theresulting risk

on

its

obligations

Company

loss

when

it

covers

openis

positionpossibility

because the market price has moved againstthat theIn

Companycounterpartynetting

Settlement

the

Company Many

may payof these

or release

assets

and

fail

to receive

the settlement

exposures are subject to

agreementsare

exposures approval

based

which reduce the net exposure to the Company Limits for counterparty on the creditworthiness of the counterparty and are subject to formal

lines

of

For execution-onlyclients

clients

the

to to

pay commissions accept thedif

Companys The Company

principalis

credit

risk to

arises the

fromthat

the

potential

failure

of

also

exposedthe

risk

clearing

broker

mayand

refuse the

enfs trade

which would

requirethat

Companyonto the

to

assume bals

the positions theprincipal

resulting risk

market riskfrom the

For cleared

customers

transact margininitial

margin

credit

arises

Company

paying

variation

exchangesvariation

before

receMng

it

from

customersto

Most customers are required to cover pay any margindeficits

and

margin

with

cash and

are required

withIn

24

hours

The Companypaidto

mitigates

the

risk

on

its

cleared they

margin business

by customers asInitial

deposit

before

can commenceDailyaffecting

tradingif

by requiring the Initial margin to be Most customers are requiredintra-day margincalls

cover

andto

variation reflect to

margins

with

cash

and

required positionsin

are

made onreserves

clients

market movements any customer

clIent

The Companyof

generallyto

the

right

liquidate

position

immediately

the event

failure

meet

margin call

The Companycounteipartles recognized

is

also

exposed

to

the

risk

of default

by counterparties and

with respect highly rated

to

positions

with

These

are mainly

exchanges

clearing-houses

and

internationally

banks

In

most markets the Company

acts

as an Intermediary

resulting

In

limited

market

risk

to the

Companywhereposition the

The

exceptions

are intra-day positions

In fixed

income

metals

and energy marketsclosing

and there may be time delays between opening and Company acts as principal The Company may also maintain small positions overnight in these markets

19

MF

Global

incof Financial

Notes to Statement

Condition

March

31

2011

In

line

with

market practicesinitial

an

affiliate

of the

Company

also provides

unsecured

credit

lines

to

some customers 1rwithits

and

variation is

trading

andother

activities that

The Companys exposure to credit risk associated also measured on an individual counterparty basis as well as marginsimilar

by groups of counterpartlesaffected

share

attributes

Concentrations

of

credit

risk

can

be

by changes

In

political

industry

or

economic factors

In

the

normal course of business the Companys customer andfinancing of various theIts

activities

include that areIn

the

executionor

settlement

customer

securities

transactions shetrisk

loaned

borrowedorsell

Theseother the

activities

may exposeunableto

Companycontracted

to off-balance obligationsat

the

event the customer hasto

broker

Is

fulfill

and the Company Therisk of

purchase on

or

financial

Instrument

underlying

the contract or issuer

loss

default

depends

the

creditworthiness

of the counterparty

of the Instrument

The Cmpanyadjustmentsfor

controls cicotiateral

this

risk

by monitoringin

the

market value

of securities

pledged

by requiringlimits

levels

the event

of

excess

market exposure

and

by establishing

such

activities

In

additionto

the

Companyfinancialif

has sold

securities

that

It

obligated obligations

purchasein

such

securities

atat

future

date

does not currently own and will therefore The Company has recorded theseat

be

the

statementsfair

March

31 2011

the

fair

values

of the relatedto

securities

and

will

incur

loss

the

value

of the

securities

Increases

subsequent

March

31 2011

Operational

Risk

Operational inadequate

risk

Is

definedinternal

as the

risk

of loss or other

adverse

consequence

arising

from

or

failed

processes people exposed tobroad

and

systems or from externaltypes ofrisks

events which

Thecould

Companyssignificant

operations

are

number of these

have

impact on the Companys business

15

Stok-Based

Compensation

Certain

of the

LTIPcosts andother

In MFGH Ltds 207 Companys employees participate Long-term Incentive Plan The Company records Its allocated share of MFGH Ltd.s stock-based compensation

The

LTIP providsrightsto

for

equity

compensationrestricted

awardsunits

In

the

form of stock

options

stock

appreciation

restricted eligible

stock

stock

awardsthe

employees

consultants

cash-based awards performance awards directors and other lndMduals who provideLtd.sfor

services

to

Board of

by the MFGH Company each as determined Directors As of March 312011 the LTIP provides

Compensationof

Committee upto

of the

the Issuance

24.3

million

shares to be issued

MFGH

Ltd Issued

restricted

stock

units

and stock

options

to

certain

of the

Companysover

eligible

under the LTIP stock employees Generally options vest in equal vested awards can be exercised subject to continued employmentdate of grant Stock options

installmentswithin

years and seven years from thethree stock atIn

have an exercisestockto units

price

equalat

to

the priceto

per

share of common

the datefull

of grant three

Restricted subject

are issued

no cost

the

employee

and vest ratably oreligibility

after

years

continued

employment

or meeting

certain

retirement

criteria

The

fair

value

of

each

share optionto the lack of

Is

estimated

at

the datefor that

of grant using Ltd.s

Black-Scholes

optionits

valuation

model Duevolatility

historical

data

MFGHtookcapital

own stock MFGH Ltd basedthe followingcriteria

expectedIndustry

on

representative

peer oflife

groupcycle

Into

account

market capitalization stage

and

structure

The

risk-free

rate

is

20

MF Globa IncNotes to Statementof Financial

Condition

March

31

2011

determined

using the

implied

yield

currently

available

on zero coupon

U.S governmentLtdthe

bonds with

aermconsistentwtththeexpee4not expectyield is

teimonhe.datef.grant

MFGHoptions

hasnotpaIandesassumedto

to

pay dividendsDuring

on

its

commonMarch

stock

in

the future

accordingly

dividendof

zero

the year

ended

31 2011 no

were granted

employees

the

CompanyThestock option for the year

activity

ended

March

31 2011

is

as follows

wel_WeightedAverage Average RemainingContractual

rctesPrice

AggregateIntrkialc

per22.13

Term

In

NumberStock options outstalu8ngnet

stock

y.ers

Value

as

of

AptI

2010

1893886

Tiansfers

5292cancelled asto of

Eerclsedlcxfefted

and

13523 4