The Government will belatedly introduce rules to force disclosure of shares held through contracts for difference (CFDs) next year – five years later than first planned.

In October 2010, the Department of Finance said it would bring forward rules on the reporting of CFD positions within weeks, in the wake of the collapse of Anglo Irish Bank, where businessman Sean Quinn had secretly built up a 29pc stake using the controversial derivatives.

However, it never happened.

Regulators in the UK introduced rules that required CFD holders to disclose their position once it passes the equivalent of a 3pc stake in 2009.

Last year the European Union issued a directive that similar rules be applied across its 28 members within two years.

Here, legislation “is likely to be introduced in early 2015”, the Department of Finance said said in an e-mail response to questions.

During its EU presidency last year, Ireland “steered the negotiations” on rules covering financial disclosure, the statement said.

“It’s outrageous,” Deirdre Somers, chief executive officer of the Irish Stock Exchange, said in an interview last month. “The Government is presiding over a situation where they’re incentivising the market to be totally opaque and fundamentally, as proven before, destructive. Nothing has changed.”

Investors

Indeed, CFDs are regaining popularity among the Irish as the country rebounds from the financial crisis, according to Joe Rundle, head of trading at ETX Capital, a London brokerage.

There are probably about 50,000 CFD investors in Ireland, a nation of about four million people, compared with 120,000 in the UK where the population is 63 million, he said in an interview.

It’s one reason Mr Rundle’s firm last month acquired Shelbourne Markets, a Dublin-based spread betting and CFD firm.One reason for the continued popularity of CFDs in Ireland may lie in their tax treatment, Ms Somers said. While a 1pc levy is applied on regular stock trades, it doesn’t apply to CFDs.

“You’ve got an incentive to buy that security instead of equities from a tax point of view,” Ms Somers said. “It’s like this is nightmare scenario stuff because people were able to avoid stamp duty.”

“There are massive transparency issues,” said Shane Corbet, a finance lecturer in Dublin City University and former CFD trader.

“We’ve seen one serious situation with CFDs and have not closed off the channels for re-occurrence.”

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