The Office of Fair Trading has criticised the way UK banks levy rights issue fees, but stopped short of referring the issue to the Competition Commission in a move that looks like a mild rebuke for investment bankers, while it deals a heavy dose of responsibility to ill-equipped fund managers

In a report today, The OFT urged companies and institutional shareholders to apply greater pressure on equity underwriting fees after finding that the market lacks effective competition on price. While placing blame on reluctant shareholders and inexperienced issuers, it suggests little action on the part of the investment banks, save for the suggestion that they might provide a breakdown of their proposed equity underwriting fees or use competitive tendering more frequently. It stops a long way short of imposing any rules.