Following a recommendation by the Rights Issue Review Group established by HM Treasury, the Association of British Insurers (ABI) has changed its guidelines on the expectations of institutional investors on the issue of shares. The new guidelines are expected to speed up the rights issue process and are likely to lead to a series of new capital raisings.

The new guidelines concern the requirement on companies to obtain shareholder authorisation of power to allot new shares and for the disapplication of pre-emption rights (sections 80 and 95, Companies Act 1985).

The guidelines will mean that companies are able to issue up to two-thirds of their existing capital without the requirement to hold an extraordinary general meeting. The previous guidelines allowed for only a third of existing capital to be issued.