Financial Conduct Authority
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New Contracts for Difference disclosure regime to take effect in June
Following extensive consultation and to help improve transparency in current market conditions, the new disclosure regime for Contracts for Difference (CfDs) will now take effect from 1 June 2009. The new rules would have applied originally from September 2009.
Details of the new regime are set out in a Policy Statement on CfDs published today by the Financial Services Authority (FSA).
The new rules cover financial instruments in the same company, which give a legal right to acquire shares or have a similar economic effect to shares. Shares and such financial instruments will have to be aggregated and disclosed once over the 3% threshold. This will ensure that they are not used covertly to influence corporate governance and/or build up stakes in companies. An exemption has also been put in place for CfD writers acting in a client-serving capacity, to prevent unnecessary disclosures to the market.
Alexander Justham, FSA director of markets, said:
"This is a very significant step in improving market transparency and we have brought the implementation date forward to reflect that. The new rules will resolve some of the concerns raised about the risks of market players devising ways to avoid disclosure or over-disclosing."
Notes for editors
- The Policy Statement is available on the FSA website.
- In October 2008, the FSA published a feedback statement setting out the general disclosure regime for the disclosure of CfDs and other financial instruments with similar economic effect as a qualifying financial instrument.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.