Companies (Share Capital and Acquisition by Company of its Own Shares) Regulations 2009

I support these regulations. They are an important continuation of what is required under the Companies Act, with the Government having learnt from what has happened since the introduction of that Act. Having made a slight criticism of the Explanatory Memorandum during debate on the previous statutory instrument, perhaps I may say that I thought that this Explanatory Memorandum was extremely clear and very helpful, putting the pros and cons in a very effective way. The first change to the Companies Act is aimed at reducing the period of notice for pre-emption rights issues by at least seven days, thereby enabling rights issue processes to be much shorter. One of the benefits not put in the Explanatory Memorandum is the significant cost-saving that will arise to the company. When rights issues are underwritten and sub-underwritten, where the underwriter has to make a commitment for the capital to be available for a period, the longer the period of the rights issue, the larger the fee the underwriter charges. Therefore, in the current climate, anything that facilitates a reduction in those fees, which in turn will facilitate more companies being able to afford a rights issue through the market, has to be commended. I have no comment on the second element of the Act to be changed. We clearly need to come into line with the relevant European directive. On the third issue, the noble Lord, Lord De Mauley, made a very good point, which is whether this increases the opportunity for market manipulation and abuse in relation to a company’s own shares. I think that the answer that the Minister will probably give is set out on page 23 of the Explanatory Memorandum, which explains that significant other provisions are available to prosecuting authorities, or indeed the City, in the event of suggested manipulation. I think that is the answer. If a company is to have the ability to buy its own shares, it seems a little strange that it should be restricted to 10 per cent and that it can have the resolution for only 18 months. If we are going to accept the principle, we might as well go the whole hog, which these regulations do, and rely on other provisions to give the necessary protection against manipulation or abuse.