FSA clamps down on shorting during rights issues

The FSA has issued a warning over the potential for market abuse of short selling during rights issue...

The FSA has issued a warning over the potential for market abuse of short selling during rights issues, saying it could damage both the issuers themselves and small investors. It says the severe volatility of share prices during rights issues is further compounded by the length of time involved during these periods of financial unrest. The regulator will conduct a review, looking at more efficient means of raising capital, at the same time as considering immediate action to maintain market confidence, preventing market abuse. The FSA said it views short selling as a legitimate techniqu...