News Article - 13 November 2007
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The Financial Services Authority (FSA) has called for "greater disclosure" over who has major "economic interests" in the shares of a company.

Outlined in a paper published on Monday, the watchdog is launching a three-month consultation to address how "contracts for difference" (CfDs) are being used by investors.

FSA's director of markets Sally Dewar said: "This is not a clampdown on CfDs but a means of addressing the concerns about their use on an undisclosed basis."

It proposes two approaches to the problem, the first of which is to require disclosure of CfDs when an investor will gain three per cent or more of the total voting rights of a company.

Secondly it suggests that CfD holders must reveal any company shares they have with an economic interest of five per cent or more.

The Association of British Insurers claims that CfD disclosure rules are less strict than for the ownership of cash equities and therefore company control is harder to follow, Reuters reports.

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