April 12, 2012

Spread betting firm to get green light to return clients' funds

The Central Bank is set to give spread betting firm Marketspreads the green light to return cash to its clients.

The Central Bank, which regulates spread betting firms in the Republic, ordered Marketspreads to suspend operations last Thursday, citing capital adequacy and audit issues.

The move prevented the firm returning funds to clients, but following a report confirming that clients’ cash is safe, the Central Bank has confirmed it intends to give the go-ahead to the company to return the money to its customers.

“Following an independent third-party review of client assets, the Central Bank is amending the direction on Marketspreads to allow for the repayment of client assets,” the regulator said in a statement yesterday.

Marketspreads did not comment. The company said last week that clients’ funds were “safe and 100 per cent intact”. The firm has not said how much in client funds it holds, as the information is commercially sensitive. However, the figure is believed to be between €5 million and €10 million.

The Central Bank statement said the company’s operations were still suspended until it addresses concerns. Company representatives are to discuss these with regulators today.

Marketspreads recently filed returns and accounts covering the nine months to December 21st December 2009, the period immediately before the current owners bought the business from its original parent, Worldspreads.

Auditors Ernst Young withheld their opinion on the financial statements after a number of issues uncovered by the new ownership prompted the company to write down assets by €7 million.

Marketspreads is working on finalising accounts for 2010, and it is understood that these are likely to have a clean audit.

Earlier this year, the Central Bank asked the company to come up with an extra €2.8 million in capital. Director and shareholder Ray Curran has agreed to convert €2.4 million in loans to preference shares and forego interest payments to deal with this problem.

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