UK: equity underwriting and associated services - OFT study published

The Office for Fair Trading has published its equity underwriting and associated services study: see here (pdf). The OFT states that it does not have significant concerns regarding the number of available providers of equity underwriting services but notes that there has been a significant increase in fees since the onset of the financial crisis but that fees and discounts have been slow to fall in line with subsequent reductions in risk. The report notes that there is little competitive tension between investment banks during the equity raising process and that companies raising equity capital are not focused principally on reducing underwriting fees. In this regard, the OFT provides several options that companies and institutional shareholders could consider for applying greater pressure on underwriting fees and discounts.