Client Alert
| July 1, 2009
FSA Q&As on Disclosure of Contracts for Differences and Similar Instruments
The FSA considers that a right issued to a shareholder in connection with a rights issue constitutes a financial instrument having similar economic effect to a qualifying instrument and, therefore, falls within the scope of DTR 5. However, it acknowledges that a shareholder who passively receives rights solely as a consequence of being an existing shareholder will be maintaining its proportionate holding in the issuer and will not be changing its long position in the economic performance of the issuer's shares. Consequently, it does not expect shareholders granted rights under a right issue to include those rights in the calculation of their position for disclosure purposes.
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This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
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