Rules designed to protect small shareholders have been relaxed to help companies to raise cash quickly during the coronavirus pandemic.
The Pre-Emption Group, which issues guidance on rights issues and fundraisings, said that companies should be allowed to issue new shares equivalent to up to 20 per cent of their existing share capital without offering them to all shareholders.
Pre-emption rights are considered a cornerstone of the stock market. They give existing shareholders first refusal of new share issues, ensuring that their existing holding is not diluted.
Under present guidelines, companies can issue new shares only equivalent to up to 10 per cent of the existing share capital without offering them to all shareholders.
The temporary changes to the rules are designed to make it
