The Financial Services Authority (FSA) today publishes its feedback statement on disclosure for contracts for difference (CfDs).
After receiving extensive feedback from a broad spectrum of interested parties on its November 2007 CfDs Consultation Paper, and as announced in its policy update of July 2008, the FSA has decided to implement a general disclosure regime for long CfD positions 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 initial disclosure threshold will be at 3%, in line with the existing disclosure rules. The FSA is proposing an exemption for CfD writers which act as intermediaries, similar to the Takeover Panel’s Recognised Intermediary exemption, to reduce unnecessary disclosures.
The Feedback Statement contains 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 they are effective. The deadline for such comments will be 23 January 2009 with the aim of issuing final rules in February 2009 to come into effect on 1 September 2009.
Alexander Justham, FSA director of markets, said:
"Our goal is to provide an effective and proportionate disclosure regime that works for all involved, and sustains market confidence and efficiency. We have received extensive support for the approach we are taking, since we announced it in July. We would like to thank all those who provided feedback."
