Investor Relations - A Practical Guide - Investis

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Determining whether a company has inside information Is the information of a ‘precise’ nature • Does it relate to circumstances that exist/are reasonably likely to come into existence • Is it specific enough to enable a conclusion to be drawn as to the possible effect of those circumstances on the price of the company’s securities (i.e. NOT solely rumour or speculation) No Yes Is the information generally available • Is it information which could be obtained by research/ analysis by market users Yes No Does the information relate directly/indirectly to the company or its securities No Yes If the information was generally available, would it be likely to have a significant effect on the price of the company’s securities or related instruments • Is the information of a kind that a ‘reasonable’ investor would be likely to use as part of the basis of his investment decisions No Yes No INSIDE INFORMATION Announcement required NOT INSIDE INFORMATION No announcement required 54 Building the Investor Relations Programme
Even if a company does have full details of certain inside information, it can still delay disclosure if its reason for doing so is so as not to prejudice its legitimate interests, provided that: • such non-disclosure would not be likely to mislead the public; • any person receiving the information owes the company a duty of confidentiality; and • the company is able to ensure the confidentiality of that information. An example of this may be where confidential and price sensitive negotiations on a deal are underway by a company and its advisers, and disclosure of the information would prejudice the outcome of the transaction. In adverse market conditions, companies may be reluctant to publish negative news in circumstances where trading may have already substantially deteriorated. The DTRs do recognise that where the company’s financial viability is in grave and imminent danger (although not insolvent), disclosure of rescue negotiations can be delayed for a limited period if the information would seriously jeopardise shareholders’ interests by undermining the conclusion of those negotiations. However, it is important to be clear that this only applies to the details of the specific transaction and not to the fact that the company is in financial difficulty, which in itself remains disclosable. Companies should consult their advisers on such matters. Although the inside information provisions do not apply directly to AIM companies, similar principles should be taken into consideration. Pursuant to the AIM Rules for Companies (“AIM Rules”), an AIM company must disclose any unpublished price sensitive information without delay. However, the AIM Rules do provide a similar carve-out to the inside information exemption in that an AIM company need not disclose unpublished information about impending developments or matters which are currently in the course of negotiation. If an AIM company is in any doubt as to whether certain information should be disclosed to the market, it should consult with its Nominated Adviser. How to announce Information that is disclosed must be available to everyone. The concept of selective disclosure to only certain people is incompatible with a transparent market and is therefore not possible, except in very limited circumstances such as when there is valid delay in disclosure as noted above. In order for information to be accessible by all, an announcement must be released to the market via a Financial Services Authority (FSA) approved Regulatory Information Service (RIS) in the first instance so as to ensure prompt and fair disclosure to the market. Building the Investor Relations Programme 55
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Investor Relations A Practical Guid
Page 3 and 4:
Contents Page 02 03 04 07 10 13 17
Page 5 and 6: Preface Michael Mitchell, General M
Page 7: What Investor Relations is and who
Page 10 and 11: Liquidity One of the outcomes quote
Page 12 and 13: Institutional Investors Andrew Buch
Page 14 and 15: Institutional Investors A Fund Mana
Page 16 and 17: Liquidity is vitally important as i
Page 18 and 19: Members of the Association of Priva
Page 20 and 21: Because analysts normally differ in
Page 22 and 23: Company Sponsored/Paid-for Research
Page 24 and 25: Media Matrix: UK & International Pr
Page 26 and 27: 24 What Investor Relations is and w
Page 29 and 30: Company Management Paul Froud, Head
Page 31 and 32: Registrar Matthew Edmund, Business
Page 33 and 34: Proxy Solicitation - knowing who ha
Page 35 and 36: Description of a corporate broking
Page 37 and 38: Institutional investor access - org
Page 39 and 40: Market making In addition to develo
Page 41 and 42: Areas that financial PR agencies ad
Page 43 and 44: Sentiment studies Corporate governa
Page 45: Building the Investor Relations Pro
Page 48 and 49: Case study: Mears Group plc Bob Hol
Page 50 and 51: Meetings Heather Salmond, Managing
Page 52 and 53: Round table debates and conferences
Page 54 and 55: Company Announcements Charles Bond,
Page 58 and 59: Any announcements should be true, a
Page 60 and 61: Reviewing annual reports (both prin
Page 62 and 63: Investor Relations Websites Al Loeh
Page 64 and 65: Content The general rule on content
Page 66 and 67: Electronic Shareholder Communicatio
Page 68 and 69: Making the communication by website
Page 71 and 72: Information in this publication is
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Investor Relations - A Practical Guide - Investis

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