Most of the estimated 2,000 clients affected by the collapse of Cork stockbrokers W & R Morrogh are expected to be fully compensated for any losses.

A small number of larger investors, however, will have to bear substantial losses, the scale of which will depend on how much money the receiver, Mr Tom Grace, can recover from the firm's partners.

Mr Grace was yesterday appointed by the Central Bank of Ireland to act as administrator to the firm to certify client claims for compensation to the Investor Compensation Company Limited.

It will now invite the firm's clients to make applications for compensation.

Clients whose investments were affected by the rogue trading activities of one of the firm's partners, Mr Stephen Pearson, can apply for compensation of up to 90 per cent of their loss, or €20,000 (£15,751), whichever is lesser.

As administrator Mr Grace will effectively monitor these claims and certify those who are eligible for compensation.

The Investor Compensation Company will then issue the compensation to them.

Net losses for the purposes of compensation are determined as money owed or belonging to the client and held on behalf of them by the investment firm in connection with the provision of investment business and services.

It also refers to investment instruments or funds managed or administered by the firm on the client's behalf.

Applications for payment of compensation should be made within the next five months. The Central Bank has some discretion to allow applications to be honoured thereafter, where good reasons are established for that delay.

W & R Morrogh is estimated to have had around 9,000 clients, with some 2,000 estimated to have been affected by the firm's collapse. According to industry sources, the bulk of these investors will receive full compensation for their losses as they would have been less than €20,000.

The outlook is less certain for the small number of larger investors, who will have to wait to see how much money can be raised by Mr Grace from the assets of the firm's partners, Mr Alec Morrogh and Mr Pearson.

As partners they had unlimited liability and must make good any losses to clients. Mr Pearson's assets are understood to be not very significant, with mortgages on his properties and other assets.

Mr Morrogh's assets are also being examined by Mr Grace, including his Cork home, although it will be some time before the amount of money that can be realised is determined.