FSA proposes radical code for financial PR firms

Financial PR firms will have to adhere to a code of practice by the end of the year, under radical plans unveiled this week by the Financial Service Authority.

The code will be voluntary, but is expected to become almost compulsory for agencies operating in the City. The London Investment Banking Authority has been charged with drawing up the code, a move that may irk some City PR vendors who want to create their own standard.

The proposed code has been prompted by an FSA review into leaks surrounding public takeovers. The ­review suggested non-FSA regulated bodies, such as lawyers, financial printers and PR agencies, did not have complete control over sensitive information.

The FSA recommended internal reviews in the event of leaks, ‘ethical hackers’ testing the robustness of IT systems and criminal record checks on staff. It also wants a crackdown on staff dealing in accounts on which they work – which many agencies already outlaw. The implications for financial agen­cies are wide-ranging, but the FSA wants to create training courses with the PRCA and CIPR to educate agencies.

‘In the future, every agency will need a full-time com­pliance function,’ argued FD chairman Charles Watson.

• For more details, see analysis in next week’s issue.

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