The Financial Services Authority in Britain is considering stricter listing rules for split capital investment trusts so that cross shareholdings between trusts and gearing levels will be clearly visible to investors. While the FSA does not directly regulate these trusts but influences them through its listing rules, its examination of 113 trusts showed that about 20 per cent of trusts had invested more than 40 per cent of their assets in other split capital trusts.

Cross shareholdings and high gearing have resulted in the suspension of dividend payments and restructuring at some funds. This sector has been criticised for lack of transparency.