Overview

In an unexpected move, the Financial Services Authority (FSA) has introduced a new provision in the code of market conduct requiring disclosure of net short positions in stocks undergoing rights issues of positions of 0.25%. The move, which took place on 20 June, was widely seen as an attempt to crack down on the manipulation of market prices and to introduce some stability in the market. Investment banks welcomed the announcement but hedge funds and their legal advisers were vocal in their anger at the move. On 16 July, the Securities and Exchange Commission (SEC) in the US announced a similar provision to take effect on 21 July.

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