UPDATE 1-KPMG expects bigger payouts to MF Global UK clients

LONDON, Jan 8 (Reuters) - MF Global UK's
administrator KPMG said it expected to increase payments to some
clients of the collapsed broker after key disputes with its U.S.
parent were resolved last month.

As a result of money changing hands during MF Global's
chaotic collapse, various company affiliates have been fighting
over who owes whom.

In December, the trustee for the MF Global estate said an
agreement had been reached between the firm's former British
affiliate and parent company MF Global Holdings which should
accelerate payouts to clients and creditors.

The agreements, which are conditional on several factors
including U.S. Bankruptcy Court approval, would see payouts to
customers with segregated accounts rise to around 60 cents in
the dollar from 26 cents, KPMG said on Tuesday.

An initial payment of around 20 pence in the pound was also
now expected to be made to unsecured creditors, it said.

"The U.S. agreements, if the conditions are met, will remove
some of the larger obstacles to returning funds to customers.
this will allow payment of the distributions set out today and
pave the way for further distributions from both pools over the
course of the year," KPMG's Richard Heis said.

MF Global used customer money to plug liquidity gaps before
it filed for bankruptcy in 2011, creating a gap of more than
$1.5 billion in customer accounts, according to a report by its

A U.S. Bankruptcy Court hearing, the first step toward
getting the British agreement approved, is scheduled for Jan.