The Financial Regulator has for the second time in a month asked stockbrokers to reveal their exposure to contracts for difference (CFDs), the investment products that carry greater risk in volatile markets.

The increased vigilance over stock market investors came last week, just as the regulator stepped up scrutiny of the banking sector by seeking weekly instead of monthly reports on lenders' ability to meet their outgoings.

It is understood that the regulator wants to assess the extent of financial losses arising from trading in CFDs, an increasingly popular form of derivative instrument that enables investors to take a position on a stock - and its likely performance - without actually owning shares.

The regulator sought similar information from brokers last month, although its spokesman said there was no particular cause for concern on that occasion.

"Nothing arose from the information we received on previous occasions that gave rise to any necessary action on our part," he said.

CFDs are exempt from stamp duty, greatly increasingly their appeal for investors. They are believed to account for more than 15 per cent of all trading on the Dublin market. Investors typically place a margin of 10-20 per cent of their nominal investment with their broker and borrow the rest, making them vulnerable to margin calls if the value of their stocks decline.

"We have written to stockbrokers seeking updated information on their exposure to CFDs and exposure of their customers. This is part of the generally intensified monitoring of firms and markets that we are currently engaged in," said the regulator's spokesman.

"We are seeking basic information from them to give us a picture of where they are. There are are currently no causes of concern."

The spokesman said the initiative was a response to recent developments in stock markets, which have plunged in value amid global uncertainty following the subprime mortgage crisis in the US.

"Generally speaking, as you might expect, it would be normal for us to make inquiries to satisfy ourselves that there would be no matters of concern in firms we regulate when significant market developments occur," the spokesman added.