FSA intervenes after chaotic rights issues

Regulator imposes stricter disclosure rules on shorting stocks in the midst of rights issues, after HBOS shares recently fell below rights price

Managers holding HBOS and other troubled banks have taken comfort from FSA proposals to regulate short selling during periods of rights issues. As of 20 June, short positions of 0.25% or more in shares undertaking rights issues must be disclosed to the market by 3.30pm the following business day. This follows allegations of market abuse after shares in HBOS, which is participating in a £4bn capital raising, fell below the rights issue price two weeks ago. The regulator warned rules may be subject to further change following a wider review of shorting during rights issues and its effec...