Published: 18th January 2010

The FSA has issued its first consultation paper of 2010 – CP10/1. It is proposing changes to SUP 16.12 (Integrated Regulatory Reporting) and to the Disclosure and Transparency Rules within DTR. Other changes apply to COLL and PRIN.

The CP was possibly edited around the time of the FSA office party as several errors have crept in e.g. Appendices 4 & 5 have been mixed up (although this has since been corrected on the current web version); Chapter 3 refers to non-existent Rules (SUP 16.2.6 & SUP 16.21.33 – substitute “2” & “21”, respectively, with “12”); and the newsletter is asking for responses by 2009. SUP 16.12 does not contain any major changes but there is clarification e.g. guidance on FSA002 (Income Statement) to avoid double counting performance fees/investment management fees and there are changes to some of the validation tests.

Not all data forms will be relevant to all firms e.g. FSA044 is for firms that accept deposits. Firms might want to compare Chapter 3 with copies of their last year’s submissions to see (a) which of their returns are actually affected and if so then (b) to see whether affected data elements will be relevant e.g. although most firms will complete the FSA003 (Capital Adequacy), not all will complete data elements concerning UK consolidation group reporting.

DTR 4 will only be relevant to issuers but proposed changes to DTR 5 may be welcomed by firms. As firms will know, DTR 5.1.2 requires notification once voting rights held exceed certain thresholds. DTR 5.3.1(1)(b) is worded so that this obligation is extended to instruments that are referenced to the shares of an issuer and which have ‘similar economic effect’.

The proposal is to exempt nil-paid rights received from an issuer during a rights issue. It is important to note that there is a ‘passive’ requirement – there must be no trading in the nil-paid shares nor in a holding relating to the issuer.

Responses to the paper need to reach the FSA by 6 March 2010 (or by 31 March 2009 according to page 3 of the accompanying newsletter). Below is a link to CP10/01. The proposed changes to the handbook can be found in the relevant appendices.

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