Irish spreadbetting firm MarketSpreads was allowed today (Wednesday) to begin honouring all client withdrawal requests, after a report submitted to the Irish Central Bank confirmed that there are “sufficient assets in client bank and custodian accounts to meet all client obligations“, and that “amounts due to clients are held in segregated client bank accounts“.
However, despite getting a clean bill of health in terms of client funds, MarketSpreads’ license was not fully reinstated by the regulator, and thus MarketSpreads clients still cannot trade. As well, all existing client positions were closed, due to the regulator’s action.
Our understanding from people close to the situation is that MarketSpreads has strong prospects of eliminating the regulator’s two issues (relating to accounting issues prior to 2010 when current management acquired MarketSpreads from WorldSpreads) within the next two weeks, paving the way for the regulator to green light the firm quickly. However if the current situation lingers, in which clients can withdraw money but cannot make new trades, one can assume that fairly quickly most (if not all) of MarketSpreads’ clients will indeed withdraw their cash and go home (or elsewhere to trade), which will leave MarketSpreads management with a license but no clients or client assets.
You can see MarketSpreads’ co-CEO John McGlade’s detailed comments on the situation in our previous article on the topic, click here.
Stay tuned…
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