The Irish Stock Exchange (ISE) recently shortened the minimum period for which an offer relating to a rights issue must remain open, from 21 calendar days to 10 business days. The change should make rights issues more attractive.

The ISE followed the UK Financial Services Authority decision to implement the shortened subscription period following a consultation process undertaken by it. The results of the consultation concluded that a reduction of the offer period would make the process of raising capital more efficient.

Now that companies can complete a rights issue sooner, it should be easier to price. The shorter period should also reduce the risk of change in the market and financial conditions and potentially result in less risk to underwriters. However, investors will have less time to decide and take action to take up their entitlements.

Companies can still conduct their rights issues over a longer period, if required. At present, the shortened timetable is available only for “non-statutory” rights issues. Companies will need to have previously disapplied the statutory pre-emption rights in general meeting to take advantage of this shorter period. If a company does not need to convene a general meeting to obtain shareholder approval to undertake a rights issue for example, to disapply pre-emption rights or to obtain allotment authority, then it could undertake a rights issue in a 16-day timetable, compared to a minimum 39-day timetable under the previous rules.

Unfortunately, the ISE has not yet updated its online version of the Listing Rules nor does it have any information on its website identifying the amendment applied in February.