Fexco Stockbrokers is understood to have asked the Central Bank to lift the order restricting it from taking on new clients.

At a meeting with Central Bank officials last week, Fexco representatives detailed changes and improvements in its back office operation and systems designed to ensure the firm was in full compliance with Bank regulations.

In a statement to The Irish Times, Mr Denis Crowley, Fexco's director of sales and marketing, said it had invested substantially in time, effort and resources over the last year to improve and introduce enhancements to its stockbroking operations and the service it provided.

"We firmly believe that we have made substantial progress in this task and are looking forward to accepting new business," he added.

Fexco was told by the Central Bank in January 2000 that it could not take on new clients. The Central Bank, which regulates stockbrokers, acted on concern that the brokers' back office and compliance systems could not cope with the dramatic increase in business Fexco had taken on due to consumer interest in shares.

In late 1999 the Central Bank and Fexco discussed the problems in the Fexco back office which is involved in the administration and settlement of share deals.

The Bank then wrote to Fexco telling it not to advertise, promote its services or market itself until its systems and staff numbers were upgraded to handle the volume of business it had taken on. The stockbroking firm is part of the Fexco financial services group set up in Killorglin, Co Kerry, in 1981 by Mr Brian McCarthy. Since it opened in late 1996 the firm has taken on about 23,000 clients.

In his statement, Mr Crowley said that of the 12 Irish stockbroking firms included on the Crest Co settlements ranking list, Fexco Stockbroking was ranked third. "These positive efforts and successes do not reflect the actions of a company planning to close for business," he added.

The Central Bank regulates the sector by information and detailed business returns from each broker. Where concerns arise, it issues directives to brokers. The severity of the directive reflects the seriousness of the Bank's concern. A spokesman explained that the directive issued in any case "would be proportionate to the level of the difficulties in the firm involved".

An order to stop taking on new clients reflects concern that staffing or systems would be unable to cope with an increase in business. In effect, the order tells a broker to "take a breather" and get its systems and staffing up to speed. At the other end of the spectrum, the bank could suspend a broker from trading if it was concerned about the firm's financial stability.

The Central Bank does not comment publicly on its regulatory actions regarding any individual firm.