Policy Perspectives: Explaining Preemptive Rights, Improving Investor Protection (Video)
Many companies in the Asia-Pacific region are seeking approval, or a mandate, from shareowners to waive their individual preemptive rights to buy new shares that the company may issue. In many cases, minority shareowners grant these mandates without fully understanding the consequences of their actions.
Padma Venkat, CFA, director of capital markets policy at CFA Institute and author of the report Non-Preemptive Share Issues in Asia: Role of Regulation in Investor Protection, and Tony Tan, CFA, head of Standards and Financial Market Integrity at CFA Institute in the Asia-Pacific region, discuss preemptive rights waivers, their use in corporate capital raising, and how these waivers dilute minority shareholders’ interests.
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