Investor Relations - A Practical Guide - Investis

Any announcements should be true, accurate and
not misleading and should not omit anything likely
to affect the import of such information. As well as
the DTRs and the AIM Rules, all companies and
their directors also need to be aware of the market
abuse regime, the financial promotion, misleading
statements and practices provisions under the
Financial Services and Markets Act 2000
(“FSMA”), the insider dealing rules under the
Criminal Justice Act 1993 (“CJA”), fraud under
the Fraud Act 2006 and, in the relevant
circumstances, the inside information provisions
under the City Code on Takeovers and Mergers.
Control of inside information
Listing Principle 2 of the UKLA’s Listing Rules
states that “a listed company must take
reasonable steps to establish and maintain
adequate procedures, systems and controls to
enable it to comply with its obligations.” This
means ensuring that its procedures, systems and
controls relating to the disclosure and protection
of inside information are sufficiently robust to
enable compliance with the DTRs. For companies
on a regulated market (which does not include AIM
companies), this includes the obligation to compile
insider lists where their employees and advisers
have access to inside information.
The obligations on AIM companies in respect of
the control of unpublished price sensitive
information are less prescriptive; such companies
are obliged to have in place sufficient procedures,
resources and controls to enable it to comply with
the AIM Rules, which includes the protection and
appropriate disclosure of unpublished price
sensitive information.
According to the FSA’s Principles of Good Practice
for the Handling of Inside Information, there should
be clear responsibility within organisations for
overseeing controls and procedures in relation to
inside information, as well as ensuring that staff
are given the appropriate level of training to
understand the importance of keeping information
secret, and the consequences of their failure to do
so. Companies may, for example, use restricted
access IT systems to limit access to inside
information. Guidance on implementation of such
policies is available from the General Counsel 100
Group, a body that represents the senior legal
officers of most of the FTSE 100 companies.
Penalties, sanctions and censure
The FSA may impose a penalty on a company for
any breach of the Listing Rules or the DTRs. The
penalty can be whatever sum the FSA considers
appropriate, given the circumstances. In addition,
the FSA may privately or publicly censure a
company or suspend trading of its securities. In
addition, if a company or its directors breach the
DTRs, it or they may also be in breach of other
statute and regulation as set out above, some of
which can result in criminal sanctions.
Similarly, if the London Stock Exchange considers
that an AIM company has breached the AIM Rules,
it may issue a warning notice against the company, a
financial penalty and/or a censure. In more extreme
circumstances, the London Stock Exchange may
cancel the admission to AIM of the company’s
securities and/or publish the fact that it has been
fined or censured and the reasons for that action.
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Building the Investor Relations Programme