New CfD disclosure regime comes into force on June 1, 2009

Abstract

Purpose

The purpose of this paper is to explain changes to Chapter 5 of the UK Disclosure and Transparency Rules (DTR 5), introducing new disclosure requirements relating to holdings of financial instruments that have a similar economic effect to shares, such as CfDs, that took effect on June 1, 2009.

Design/methodology/approach

The paper explains the principles behind the extended disclosure regime and summarizes questions and answers from the FSA to assist market participants' understanding of that regime, covering issues such as domicile of the issuer, instruments covered, how a disclosable holding is calculated, the inclusion of financial instruments relating to unissued shares, treatment of holdings acquired before June 1, 2009, potential double counting, how the regime applies to intra‐group movements of holdings and delta‐adjusted reporting, and exemptions for client‐serving intermediaries, market timing, trading books, and investment management.

Findings

Qualifiying financial instruments give a legal right to acquire (on the holder's own initiative) shares already in issue and with voting rights attached. The policy behind the new regime is to require the disclosure of financial instruments with similar economic effect to qualifying financial instruments which are used to build stakes in companies.

Originality/value

The paper presents practical guidance from experienced financial institution and securities lawyers.

Citation

Bates, C., Conceicao, C., Poulton, M. and Pudge, D. (2009), "New CfD disclosure regime comes into force on June 1, 2009", Journal of Investment Compliance, Vol. 10 No. 3, pp. 44-48. https://doi.org/10.1108/15285810910995584