A leading City journalist this week condemned the Financial
Services Authority for its heavy-handed attempt to snuff out alleged
market abuse by financial PROs.
The Observer business editor Frank Kane told the PRWeek Forum that he
intended to campaign against fresh FSA regulations, set to come into
force on 1 December, as they threaten to choke off a crucial source of
material for City reporters.
'It is a ridiculous, dangerous limitation on the freedom of the press,'
Kane said. 'It robs the market of liquidity by denying information to
the 12 million individual investors outside the institutions.'
Turning his ire on FSA chairman Howard Davies, Kane said: 'Davies has
deliberately excluded journalists from the requirements of his new
rules, but has gone for an easier target - PR people.'
The FSA will be able to impose unlimited fines for market abuse, which
includes the misuse of information; creating false or misleading
information - such as posting messages on internet bulletin boards; and
distorting the market.
The PR industry this week dismissed concerns raised by the FSA over the
sector's failure to meet new standards on preventing market abuse.
City PR leaders hit back at the FSA's claims that consultancies have
ignored the implications of the body's new regulations.
IPR corporate and financial group chairman Richard Pollen said the FSA's
warnings of fines for those who mislead the market are 'unconstructive'.
He said PR firms are aware of the upcoming regime and operate within the
existing regulations.
'Any PR firm worth its salt is aware of the regulations,' said
Pollen.
'There are bound to be some who will stray away from the straight and
narrow, but I think this is a bit strong.'
An FSA spokesman said: 'The new Code of Market Conduct is designed to
catch wrong-doing. It's important listed companies and PR advisers do
not take advantage of inside information. What we're saying is that when
these new regulations come into effect, if we find anyone breaching
them, we will fine them.'
But City PR leaders insisted this week that the regulations will not
affect the majority of firms.
Maitland Consultancy chairman Angus Maitland said the standards were
welcomed, but added: 'If financial PR companies were in the past
behaving properly, then they needn't be concerned about these new
regulations.'
Leader, p10.
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