FSA concerns on disclosure controls.
Just checking on the FSA website for something yesterday, and up pops a rather extraordinary letter, sent this week by the FSA– or rather the UK Listing Authority. It notes that there have been “several high-profile examples of potential problems in the ongoing financial reporting processes in the non-FTSE 350 constituency”.
It goes on to remind issuers of Listing Principle 2 which requires companies to take reasonable steps to establish and maintain adequate procedures, systems and controls to enable them to comply with their obligations.
Clearly there must have been problems, although they have not been very obvious in terms of censure or sanctions.
Deciding on the information to disclose is one of the more difficult parts of an IRO’s job. It is a theme that occupies a great deal of time in the Investor Relations Society compliance course that I moderate. IR professionals on the course find it useful to discuss how they reach those decisions.
The old Price Sensitive Information Guide provided guidance to IRO’s in making this decision. Today, IRO’s must rely on the rules themselves and on List!, which clearly says at the bottom of every page that its contents do not constitute ‘guidance’.
Indeed the whole thrust of the Disclosure and Transparency rules is to place the decisions on inside information on companies. After all, argues the FSA, who is better placed to make the decision, given the unique circumstances that apply.
Creating the ‘command structure’ to make that decision is by no means easy. Which is why, in context of the IRS Compliance course we have created a starting point – the Internal Rules Guide. Clearly this needs to be adapted to your own situations, but it provides a framework in which to consider the approach.
This aims to help companies in the ‘processes’ of identifying inside information, how to control it, the mechanics of distribution, and limits on speaking to outsiders such as analysts and the media. If you would like a copy of this Guide, please don’t hesitate to contact me.
And by the way, issues and concerns are not limited to companies outside the FTSE 350!
It goes on to remind issuers of Listing Principle 2 which requires companies to take reasonable steps to establish and maintain adequate procedures, systems and controls to enable them to comply with their obligations.
Clearly there must have been problems, although they have not been very obvious in terms of censure or sanctions.
Deciding on the information to disclose is one of the more difficult parts of an IRO’s job. It is a theme that occupies a great deal of time in the Investor Relations Society compliance course that I moderate. IR professionals on the course find it useful to discuss how they reach those decisions.
The old Price Sensitive Information Guide provided guidance to IRO’s in making this decision. Today, IRO’s must rely on the rules themselves and on List!, which clearly says at the bottom of every page that its contents do not constitute ‘guidance’.
Indeed the whole thrust of the Disclosure and Transparency rules is to place the decisions on inside information on companies. After all, argues the FSA, who is better placed to make the decision, given the unique circumstances that apply.
Creating the ‘command structure’ to make that decision is by no means easy. Which is why, in context of the IRS Compliance course we have created a starting point – the Internal Rules Guide. Clearly this needs to be adapted to your own situations, but it provides a framework in which to consider the approach.
This aims to help companies in the ‘processes’ of identifying inside information, how to control it, the mechanics of distribution, and limits on speaking to outsiders such as analysts and the media. If you would like a copy of this Guide, please don’t hesitate to contact me.
And by the way, issues and concerns are not limited to companies outside the FTSE 350!
posted by Mark Hynes @ 10:38 am
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