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Compo body warns reserves not enough


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State body arranged €50m 'stand-by' credit


THE State-run Investor Compensation Company (ICCL) has warned that its current levels of reserves may only serve as "minimal buffers" in the event of a major investment firm collapsing.


ICCL chairman Jim Bardon has claimed that moves to expand the range of products and services covered by the organisation could lead to pressure on resources.


"Against this background, the board is firmly of the view that the current levels of reserves can only be regarded as minimal buffers to help smooth the impact on the industry of its liability to meet the costs of investor compensation in the event of firm failures," Bardon notes in his chairman's statement for the year.


The stock market carnage over the last four months, coupled with a savage landscape in the property sector, has made it increasingly likely that sectors of the investment community are suffering increased financial stresses. An examiner has been called in to Tiarnan O'Mahoney's ISTC and investigations are under way into the activities of solicitors Michael Lynn and Thomas Byrne.


In recent weeks, the Financial Regulator has sought information from stockbroking firms, asking them the reveal the depth of their and their clients' exposure to highly risky CFD products.


The ICCL now has reserves of over €20m to compensate investors in case of disaster.





© 2007 Independent.ie

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