Thursday 3rd April 2008
The Financial Services Authority (FSA) could be set to review its rules regarding the disclosure of stock interests which are not held directly through share ownership.
According to the Guardian, the regulator is considering carrying out more work following a period of consultation held earlier in the year.
Contracts for difference (CFDs) are a focal point of the debate, allowing cheaper access to a companys shares than by purchasing stock outright.
Prior to the consultation, the FSA proposed that disclosure should be required for CFDs which amount to more than three per cent of the voting rights for a firm.
However, it allowed for such disclosure to be unnecessary if it was clear that the voting rights would not be exercised.
Further proposals allowed for companies to demand the disclosure of any CFD amounting to more than five per cent of the total stock issued.
But the Guardian suggests that the response received from the Association of British Insurers could have spurred further consideration of the topic.
This, the publication notes, called for a combination of the different options to be used in order to put in place the most effective disclosure regulations.
Instead of the FSAs suggested levels, the ABI argued for disclosure of CFDs amounting to more than three per cent of the total stock in a company.
Beyond this, it espoused a process by which stock held privately in addition to through CFDs should also be reported.
"CfDs now drive up to 40 per cent of daily trading volumes and have become an instrument of choice for many investors," the ABI observed.
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