Pre-emption rights

This article describes the background to, and discusses the main issues surrounding, the recent debate over the pre-emption rights of a company's shareholders. A group convened by The International Stock Exchange, including representatives both of users of the capital market and of institutional investors, has recently issued guidelines on the subject, which should greatly clarify acceptable practice on the disapplication of shareholders' statutory pre-emption rights. The article suggests that the practical effects of the new guidelines will need to be monitored in order to ensure that these remain relevant in possibly changing circumstances.

Pre-emption rights