| 12.8°C Dublin

Marketspreads gets go-ahead to return clients' funds

The Central Bank has told Marketspreads that it can begin returning funds to clients but its trading licence remains suspended until it addresses the watchdog's concerns about its financial statements and capital position.

A report prepared by accountancy firm Grant Thornton that sought to reassure the Central Bank that Marketspreads' client liabilities were matched with segregated funds was delivered to the regulator on Tuesday evening.

The Central Bank said yesterday morning that following the review by Grant Thornton, it was amending the direction on Marketspreads to "allow for the repayment of client assets".

It's believed the spread-betting firm holds anything up to €10m in client funds.

Marketspreads executives met Central Bank officials yesterday to discuss the regulator's remaining concerns.

It's believed that Marketspreads management already believe the firm to be adequately capitalised.

A €2.5m pledge has already been secured by the firm, which is headed by joint acting chief executives John McGlade and John McNicholl, to increase its capital base.

Auditors Ernst & Young were unable to give an opinion on accounts dating back to 2009, the year before Marketspreads was spun out of Worldspreads in a management buyout.

Marketspreads has been trying to accelerate an audit of its accounts for 2010 by auditors Hughes Blake.

The firm believes those accounts should satisfy the Central Bank in relation to any concerns it may have.

Marketspreads has previously told its roughly 2,000 clients that it remains "solvent and profitable".

Marketspreads was caught up in the fallout from the collapse of Worldspreads last month. It was placed in administration by the UK's Financial Services Authority when it emerged there was a €12m shortfall in Worldspreads' customer accounts.

Indo Business