The FSA says that it is unlikely to make further comment on individual split capital investment trus...
The FSA says that it is unlikely to make further comment on individual split capital investment trust companies and managers unless it feels companies are breaking its rules.
Even a call to give evidence before Commons select committees is unlikely to result in naming and shaming the regulator says, as many of the issues currently being discussed in the public domain are more likely to involve stock exchange listing rules rather than FSA regulations.
This could especially be the case of Aberdeen Asset Management (AAM), which the FSA says that it will not comment on, despite its own ongoing investigation into splits industry problems, primarily the gearing problems caused by the large number of splits buying each others' shares.
Investors in splits trusts are still to see much in the way of positive outcomes for themselves from that investigation, and even investors in asset management companies must be wondering what sort of risk discount should be applied to their shares given the FSA's apparently slow reaction to the meltdown of the splits sector.
In AAM's case, its is being put to shame by some of the so-called "dot.bomb" companies, as its shares have lost well over 90% of their value in the past year, and there are even questions being raised over its abilities to pay off debts.
Any such cash crunch would indeed need to be reported by the company in accordance with listing rules, but even if the company goes on, many of its products are unlikely to survive, leaving a bitter taste in the mouths of retail investors whose interests are supposed to be, at least partially, covered by regulatory intervention.
Some drips and drabs of information may be expected from the FSA on the splits issue as its investigations continue, but until the rules outlining the regulator's powers change to make it easier for its employees to comment publicly on individual regulated companies investors are always going to be playing a catch-up game.
Shares in AAM were up 0.5p to 47.5p earlier today, but investors have already lost more than £3.50 per share since January this year.
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