LSE puts back warrants market launch

The London Stock Exchange (LSE) has delayed the launch of its covered warrants market until September.

This is because the UK regulator, the Financial Services Authority (FSA), is revising rules and definitions for the regulation of the new market. In a consultation paper issued last November, it envisaged widening the derivatives market to allow investors direct access via the LSE by April.

Industry responses to the paper questioned whether they should be treated as derivatives because this would raise issues on how they could be sold.

Patrick Humphris, FSA spokesman, said some of the responses wanted the covered warrants to be treated as securities as this would require advisers to adhere to fewer procedures in recommending them to investors than if they were classed as derivatives.

He said the FSA is now consulting closely with the stock exchange and others in the market and it wants to bring out a new policy in the summer.

Large in Germany, the UK warrants market has been less popular, although it is thought the LSE market, once launched, will widen opportunities and give way to greater use of the investment.