UK: FSA report to HM Treasury on the implementation of the recommendations of the Rights Issue Review Group

The Financial Services Authority has published its report to HM Treasury on the implementation of the recommendations of the Rights Issue Review Group: see here (pdf). The report notes:

The RIRG report’s two key recommendations were to shorten the minimum rights issue subscription period from three to roughly two weeks and to increase the allotment ceiling from one-third to two-thirds. The implementation of these recommendations has created a significantly better environment for rights issues from that when the RIRG report was published.

The RIRG report made a number of other recommendations relating to the duration of rights issues and to underwriting and short selling. These are also addressed in this paper as are the three RIRG recommendations concerning conditional rights issues, compensatory open offers and accelerated pre-emptive issues. The latter three topics have been the subject of a series of meetings with market participants in 2009. We originally thought they would have been the basis of a consultative paper, either a discussion paper or a consultation paper, depending on our findings. However, we have now concluded that a consultative paper is not needed ..."