COMMENT:Another broadside at a cosy City club
Friday 24 March 1995
The Treasury and the Securities and Investment Board remain committed to removing impediments to innovation and to lowering the costs of doing business in the City. Quite right too:there is no reason why those who use the City should not be able to exercise their consumer muscle as they do in other industries.
Although stopping short of labelling the time-honoured arrangements for underwriting rights issues a cartel, yesterday's OFT report criticises the business for being run like a cosy club. There is no earthly reason, the OFT says, why tradition alone should set a fee for underwriting at a generous 2 per cent, along with a substantial discount on the shares that hardly ever moves out of the 15 to 20 per cent range. Its instincts that this is not quite a free and competitive market are right.
The whole business of raising capital needs to become cheaper, more flexible and more innovative. Although it has decided against a referral to the Monopolies and Mergers Commission, the OFT served notice that it will keep a beady eye on what it called this opaque area of City practice.
The OFT also wants to crack its whip over the privileges of market makers. This can only speed the advent of an order-driven dealing system.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
British are sexually uptight, dirty and drink too much – according to Spanish book
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...