ALL the major stockbroking firms contacted by The Irish Times yesterday claimed they do not operate the type of "roll-over" system which is the main cause of the financial problems at MMI.

The roll-over system is when a brokerage buys stock for a client, but allows the client to defer or roll-over most of the payment for those shares. The danger is that, if the value of the shares plummet, the brokerage is left holding a large number of shares which clients may no longer be prepared to buy.

Regulations from the Central Bank and the Irish Stock Exchange allow roll-overs for up to 25 days. In MMI's case the payment was rolled over a number of successive two-week settlement periods with MMI levying a penalty of a 1/4p to 1p a share on clients who took advantage of the roll-over arrangement.

Other brokerages said MMI's roll-over system appeared to be unique in that it involved a concentration on one stock, which would be regarded as risky by many.

A spokeswoman for Davy Stockbrokers said yesterday the company did not operate a similar kind of roll-over system. BCP Stockbrokers said roll-over arrangements were "outlawed" at the brokerage. Other brokerages which said they did not operate such roll-over arrangements include Goodbody, Bloxham and Fexco.

Mr John Keithly, of NCB Stockbrokers' private client division, said NCB had "standard settlement terms" and did not offer longer roll-over arrangements. Standard settlements usually take place between five and 10 days.

One broker said roll-over arrangements, if they are done at all, should only be done with dependable stocks. However, another broker disagreed and said that even leading stocks had taken a hammering in recent weeks. "The problem is rolling over settlement when the market turns sour; it doesn't matter what stock you have at that stage".