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Aitc chief godfrey urges trust boards to use the treasury

The Association of Investment Trust Companies has called for more trust boards to use treasury shares.

Director-general Daniel Godfrey has made a plea to the boards of investment trust companies in a bid to get them to consider buying back shares and holding them “in treasury” to be sold back at a later date.

It is a year since the rules governing investment trusts changed to allowed treasury shares to be held. The first trust to do so was the Finsbury growth & income trust, which resold treasury shares into the market in May 2004.

Only 11 trusts have taken up the opportunity since then while several have asked for shareholders’ permission.

Godfrey says: “The inclusion of investment trusts in the treasury share regulations has provided boards with an imp-ortant additional tool to help manage the liquidity of shares, and the AITC is urging boards to consider the use of them.

“What is suitable for one trust might not necessarily be right for another and treasury shares will not be appropriate for all trusts but the AITC would like to see the issue addressed by all boards as a matter of course.”

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