Monday 20 November 2017

Stock exchange calls for full disclosure of CFD positions

Emmet Oliver Deputy Business Editor

Listed Irish companies are still unable to find out who holds major stakes in their companies using CFDs, the Irish Stock Exchange has said.

Two years after the CFD controversy involving Sean Quinn erupted, the disclosure rules covering CFDs remain unchanged, but the exchange is now pushing for CFD rules to be broadly similar to those governing ordinary share trading.

Contracts for difference (CFDs) are a contract between a buyer and a seller where the seller agrees to pay the buyer the difference between today's share price and the share price at some date in the future. "As CFDs generally fall outside the scope of regulatory framework governing disclosure, the lack of disclosure of CFD positions means that listed companies are unable to determine who has significant economic exposure to their shares,'' says a stock exchange document, given to the EU. The exchange is in contact with the EU about amending the transparency directive to beef up the disclosure rules concerning CFDs.

"There is an opportunity to introduce a CFD disclosure regime at EU level by the introduction of new provisions into the major shareholder disclosure regime of the transparency directive,'' said an exchange spokeswoman yesterday.

The exchange's submission to the EU said that over the past number of years there had been significant growth in CFD trading. It is believed different countries have different rules, with the EU now looking for a common approach.

Mr Quinn issued a statement in July 2008 outlining plans to convert his family's interests in Anglo Irish Bank into ordinary shares. The family would have 15pc of the bank after this process, the statement said.

The Quinn family said they had decided to convert their holdings in Anglo Irish to reflect their long-term commitment to the investment. "The family regards these shareholdings in Anglo Irish Bank as long-term holdings with significant opportunity for capital growth over such a period,'' commented Sean Quinn, chairman of the Quinn Group, at the time.

However, the nationalisation of the bank in January 2009 rendered the stake effectively worthless.

Irish Independent

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