Scheme to compensate spread-bet firm clients

ALMOST ALL 15,000 clients of collapsed financial spread-betting firm Worldspreads are covered by a compensation scheme operated by its UK regulator.

The Irish-headquartered Worldspreads plc group collapsed in March when the board discovered a £13 million (€16.15 million) shortfall in client funds in its main operating business, London-based Worldspreads Ltd. The company owed its clients £29.7 million but had just £16.6 million to pay them.

Yesterday, the UK financial services authority confirmed that almost all Worldspreads’ 15,000 clients qualified for a statutory compensation scheme established to protect customers of financial services firms.

The financial services compensation scheme covers losses up to £50,000.

Worldspreads owed about 80 clients more than £50,000. In their case, the compensation scheme will pay them £50,000, and they will be able to recover a portion of the balance from a pool established by the special administrators who took over the company in March.

The pool will be established from the company’s remaining resources and those clients will be repaid on a pro-rata basis. In other words, if the pool covers 50 per cent of the company’s liabilities, they will be paid 50 per cent of the figure due to them above £50,000.