UK's Financial Services Authority: WorldSpreads Limited Enters Special Administration Regime

UK's Financial Services Authority: WorldSpreads Limited Enters Special Administration Regime

Sun, 18 Mar 2012 16:24:00 GMT - News Articles
The Financial Services Authority (FSA) confirms that WorldSpreads Limited (WorldSpreads), a spreadbetting company, has entered the Special Administration Regime (SAR) on 18 March 2012. Upon the application of the directors of WorldSpreads, the High Court has appointed Jane Moriarty and Samantha Bewick of KPMG LLP as joint special administrators.
The administration of WorldSpreads follows the discovery of accounting irregularities which the company became aware of during the course of Friday 16 March 2012. Following this it quickly became apparent that the company was unable to continue in business and the directors and their advisors concluded that the best course of action, in order to mitigate losses for clients, would be to place the company into special administration.
The joint special administrators will review the client cash holdings positions and will return as much cash as possible directly to each client as soon as practicable. However, clients should be aware that any shortfall in the client money accounts will impact the amount of money that can be returned.
Depending on individual circumstances customers may have access to the Financial Services Compensation Scheme (FSCS) should there be any losses. Customers should contact the special administrators to understand more about implications for them personally.
Customers of WorldSpreads should contact the joint special administrators for more information on 020 3284 8829.

 Background

1. WorldSpreads Limited is a wholly owned subsidiary of WorldSpreads plc, a company incorporated in Dublin, Ireland and listed on Alternative Investment Market and on the Irish Stock Market, ESM.
2. The Special Administration Regime came into effect in February 2011 and sets three objectives for a special administrator:
   
   • to ensure the return of client assets as soon as practicable;
   • to ensure timely engagement with market infrastructure bodies and the authorities; and
   • either to rescue the firm as a going concern or wind it up in the best interests of the creditors.
   In an ordinary corporate administration proceeding only the third objective would apply.
3. This is the third time the SAR has been initiated.
4. The FSA can direct the special administrator to prioritise one or more of these objectives if it considers that to be necessary on UK financial stability grounds but before it does so it must consult HM Treasury and the Bank of England.
5. The special administrator can direct any suppliers to continue to provide key services to the entity in the SAR, to facilitate an orderly resolution.
6. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.