Rights issues can be a prolonged and overly complicated process. The extended timetables needed to complete some of the bank rights issues last year gave ample time for the banks’ share prices to move, creating uncertainty over the outcome. In the case of HBOS the need for a general meeting, the time to prepare a prospectus and the period for which the issue had to be open all meant that the process took 83 days.
Additional IFRS 7 disclosures on the fair value of investments in debt instruments look to be rushed into accounting standards and be effective for periods ending after 15 December 2008 even though the exposure draft was only published just before Christmas. However, the timings for the EU endorsement process are unclear at this stage.
