The UK’s Financial Services will adopt a new disclosure regime for Contracts for Difference, the FSA said Tuesday.

The new rules, which will take effect June 1, cover financial instruments, which give a legal right to acquire shares or have a similar economic effect to shares. Under the new regime, shares and such financial instruments will have to be aggregated and disclosed once they reach a 3% threshold. The FSA says that this will ensure that they are not used covertly to influence corporate governance and/or build up stakes in companies.

“This is a very significant step in improving market transparency and we have brought the implementation date forward to reflect that,” said Alexander Justham, FSA director of markets. “The new rules will resolve some of the concerns raised about the risks of market players devising ways to avoid disclosure or over-disclosing.”

An exemption has also been put in place for CfD writers acting in a client-serving capacity, to prevent unnecessary disclosures to the market.

IE