The FSA has proposed to limit the amount of shares investment trusts may be allowed to hold in treas...
The FSA has proposed to limit the amount of shares investment trusts may be allowed to hold in treasury to 10% of the issued capital.
The limit was one of the changes the regulator has proposed making to the Listing Rules in order to allow investment trusts to hold bought-back shares in treasury rather than cancelling them.
In Consultation Paper 182, the FSA said the value of shares held in treasury may not exceed 10% of the issued share capital. Or, where the company's share capital is divided into shares of different classes, it may not exceed 10% of the nominal value of each class.
Trusts will also be prohibited from selling or transferring shares out of treasury while the company is in a closed period or in possession of unpublished price sensitive information.
There would also be a limit on the discount to market price at which shares could be sold out of treasury non pre-emptively, while shares held in treasury would be disregarded for the purposes of issued share capital and voting capital.
The regulations are proposed to come into force on 1 December, together with associated tax legislation contained in the April Finance Bill.
The period for consultation responses closes on 8 August.
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