Mark Hynes - thoughts on corporate disclosure

Opinions on changing rules, changing best practices, and their effect on investor relations officers.

Tuesday, March 22, 2005

Who are the regulators?


To understand the rules, it is helpful to under who are rule makers are.

Lets start with the HM Treasury. The Treasury is the United Kingdom's economics and finance ministry. It is responsible for formulating and implementing the Government's financial and economic policy. The Treasury appoints the board of the Financial Services Authority, which has day to day, the most influence on regulation affecting IRO’s.

The Financial Services Authority (FSA) is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000, which includes several sections of law which directly impact IRO’s of UK listed companies.

The FSA is a company limited by guarantee and financed by the financial services industry. The Board sets out overall policy, but day-to-day decisions and management of the staff are the responsibility of the Executive. The FSA is the UK’s competent authority, and responsible for implementing new regulations that impact IRO’s. Among the ‘departments’ of the FSA are the UK Listing Authority, whose help desk on 020 7066 8333 is the day to day point for IRO’s of UK listed companies.

The Department of Trade and Industry is a government ministry, linking government, businesses, employees, unions, consumers and the scientific community. One part of its responsibilities is the Companies Act 1985, which mandates a lot of work done by IRO’ and company secretaries.

The Panel on Takeovers and Mergers (“the Panel”) is the regulatory body which administers the City Code on Takeovers and Mergers (“the Code”). Its central objective is to ensure equality of treatment and opportunity for all shareholders in takeover bids. It is a kind of independent referee which lays down the rules in a contested takeover, and then ensures they are met.

Finally, The Financial Reporting Council (FRC) is the UK's independent regulator for corporate reporting and governance. Its main area of responsibility is for the UK’s corporate governance code – the Combined Code - which is itself not legally binding.

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