Contracts for difference (CfDs) will require similar disclosure rules to major shareholdings and instruments which give the right to acquire shares, the FSA says.
The regulator says the changes are needed to ensure the market acts effectively and with confidence.
The new rules will require holders of CfDs equivalent to more than 3% of a single company will be required to disclose their position.
CfDs are a contract between two parties where one will pay the difference between an asset’s current value and its value at contract time. It can be used to take a short position and is a type of derivative.
Holders of shares over 3% and those with financial instruments that give them the right to acquire shares are already governed by similar rules to those proposed.
The FSA believes the new disclosure regime is the most effective way to address concerns over the effect CfDs might have on voting rights and corporate influence.
Alexander Justham, FSA director of markets, comments: “Our goal is to provide an effective and proportionate disclosure regime that works for all involved, and sustains market confidence and efficiency.
“We have received extensive support for the approach we are taking, since we announced it in July. We would like to thank all those who provided feedback.”
The regulation is now finalised, but the FSA says it will accept further technical comments to ensure the rules are effective. Those wishing to comment should inform the FSA by 23 January 2009.
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