UK trader transparency 'to be boosted'

3 July 2008

Investors who take out a stake of larger than three per cent in a company using Contracts For Difference (CFDs) are to be forced to disclose their actions in the UK.

City regulator the Financial Services Authority (FSA) is to implement the requirement in order to expose firms who take up "synthetic" positions, boosting transparency in the sector.

CFDs are a type of financial instrument used to "own" shares without the obligation of paying a type of tax known in Britain as stamp duty.

Commenting on the announcement to the Times newspaper, Sarah Bowles at Simmons & Simmons said: "This comes as a surprise."

An anonymous executive at a "major" investment house added: "It's a good thing. Give the FSA a tick."

As part of its drive for greater clarity in the financial sector, the FSA announced last month that firms who took up short-selling positions in companies which were undergoing rights issues at the time would also be required to make their moves public.

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