Price Stabilisation Rules FSA CP40 - ACT Response

Mr Andy Murfin
Markets and Exchanges Division
FSA

10 April 2000

Dear Mr Murfin

CP40 - THE PRICE STABILISING RULES

Following various conversations between yourselves and representatives of the Association, we are writing to confirm our comments relating to the section of CP40 dealing with market disclosure and customer disclosure.

We have seen IPMA's response to CP40 dated 24 March and support the section of that response that deals with accounting to the issuer. We feel strongly that stabilisation is a benefit to issuers and we have been unable to identify any circumstances in which issuers have been disadvantaged by stabilisation or the way in which it has been carried out. We accept that there may have been cases in which issuers have been disadvantaged and have not been aware of the fact. Some issuers may have been reluctant to ask for information from lead managers or may not have been properly advised of their right to do so. However we do not support a regulatory approach to accounting to issuers since we believe that there is no benefit to be gained from regulating something that currently works well, but there could be some drawbacks.