The Financial Services Authority in the UK has issued a consultation paper on subscription periods for companies undertaking a rights issue. The paper proposes to reduce the minimum subscription period from 21 calendar days to 14 calendar days, or 10 business days.
The regulator says this will help make capital raising more efficient. The proposals follow recommendations made in the Rights Issue Review Group report to the Chancellor of the Exchequer on November 24.
During a rights issue subscription period, existing shareholders of the company have the right to buy new shares in proportion to their existing holdings. These rights can also be bought and sold in the market.
The proposed rule change will only apply to the minimum subscription period. Issuers and their advisers can still conduct their rights issues over a longer period, if required.
The consultation closes on January 26 and the FSA says it will aim to finalise the proposals with changes to the relevant Listing Rules taking effect at the start of February.