The Financial Services Authority (FSA) has written to City firms to confirm whether 'spinning' was a feature of the UK market during recent initial public offerings (IPOs).

The FSA has requested information on the processes UK firms use to prevent `spinning'. It is also seeking views on a possible rule change which would outlaw certain types of conduct.

The FSA defines 'spinning' is the alleged practice of providing shares in popular IPOs to senior executives in the hope of attracting corporate finance business.

Howard Davies, executive chairman of the FSA said: "Recent disclosures in the US have thrown a spotlight on market practices surrounding IPOs.

"We want to be sure that firms operating in our markets meet the high standards implied by our regulatory principles."

Topics