After receiving feedback from interested parties on its November 2007 CfDs Consultation Paper, the Financial Services Authority (FSA) has decided a general disclosure regime for long CfD positions will be implemented as the most effective way of addressing concerns in relation to voting rights and corporate influence.
Existing share and CfD holdings, in the same company, should be aggregated for disclosure purposes. The disclosure threshold will be at 3%, in line with the existing disclosure rules. The FSA will develop an exemption for CfD writers, who act as intermediaries, similar to the Takeover Panel’s Recognised Intermediary exemption to reduce unnecessary disclosures.
The Investment Management Association (IMA) welcomed the changes.
“Greater disclosure regarding trading positions is welcome,” says Guy Sears, the IMA’s director – wholesale. “By not limiting themselves to positions that directly control votes, the FSA’s proposal reduces the chances that ‘creative’ investors might avoid the spirit of the new rules.”
The FSA will publish a Policy Statement in September 2008 with a Feedback Statement on the consultation responses, along with draft rules to implement the position described above. Although the position has now been finalised, the FSA will accept technical comments on the rules to ensure the new rules are workable. Final rules will be issued in February 2009.
“Our goal is to provide an effective and proportionate disclosure regime that works for all involved, and sustains market confidence and efficiency,” says Alexander Justham, the FSA’s director of markets. “We have received extensive feedback on this issue and we recognise that views differ widely across the market. Taking this into account we have devised a solution that meets the concerns and issues raised. We would like to thank all those who provided feedback.”