The regulation of synthetic holdings with access to voting rights

Christian Alexander Mecklenburg-Guzman. Researcher Warwick Law School.

Introduction

The Financial Service Authority (FSA) introduced a new regime requiring the disclosure of synthetic holdings equally to shares with effect of September 2009. The disclosure of shares assists identifying dominant investors; however, the disclosure of synthetic holdings does cannot serve the same purpose as reasons to hold these is different from actual shares and might be also subject to market fluctuations. The motivation of current research is to analyse the implications of this regime. It generates extensive costs which has inevitably detrimental effects on the UK financial market. The findings suggest that base for the current regime is faulty and the costs exceed the benefits. It will be recommended that the regime needs revision and should approximate the US regime.