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Marketspreads to seek client escrow account

SPREAD-betting firm Marketspreads has been examining the possibility of establishing a Central Bank-approved escrow account that would enable its clients to leave their funds poised for use when the firm is ready to trade again.

Marketspreads, whose operations have been frozen for more than a week by the regulator, had been told by the Central Bank it could return its client funds.

Many of the firm's 2,000 subscribers have apparently indicated they intend to keep trading with the business if it can get its suspension lifted.

The company had an independent report drawn up by accountancy firm Grant Thornton, at the request of the Central Bank, which showed its client liabilities were matched with segregated funds.

That prompted the Central Bank this week to allow Marketspreads to begin returning funds to clients.

The Central Bank now wants the firm to address issues surrounding its capital position and its financial statements.

Marketspreads is hoping that it could be in a position to restart trading operations as soon as Monday week.

Auditor

Its auditor is in the process of auditing the firm's 2010 accounts, which will assist the Central Bank in making a decision on lifting Marketspreads' suspension.

Marketspreads split from Worldspreads in 2010 following a management buyout.

However, some of its former executives have been accused of engaging in trading activities with Marketspreads that weren't disclosed to the firm.

The current directors, acting joint chief executives John McGlade and John McNicholl, weren't involved with the company at the time. Ernst & Young said it had been unable to form an opinion about the accounts dating to 2009, which spooked the Central Bank.

Irish Independent