City & Corporate: Tight regulatory climate leads to disclosure boom

Quoted companies have dramatically increased their volume of regulatory announcements as investors and regulators call for more corporate transparency.

The London Stock Exchange's Regulatory News Service (RNS), which handled over 93 per cent of the price-sensitive trading statements UK companies made in January, said the number of announcements made in the UK market has risen by more than 30 per cent over the past five years.

Companies made 17,377 regulatory announcements in March, up from 13,341 in March 2000.

RNS head Simon Wilkinson said the jump reflected 'changing attitudes towards disclosure', citing in particular the Combined Code on Corporate Governance, which was updated in 2003 to incorporate the recommendations of the report by Nigel Turnbull.

The report helped companies to define the minimum levels of disclosure they should meet.

Wilkinson said that this and 'more dialogue between companies and their investors had a very significant impact in encouraging companies to disclose news that might be seen as material to the company's future value'.

Wilkinson added that general retailers' share of regulatory announcements had fallen steadily from 23 per cent in January 2003 to 19 per cent the following January and to 14 per cent this January, as companies in other sectors provided the media and the market with more information.

January saw more price-sensitive trading updates than any other month, Wilkinson said.

RNS remains the largest primary information provider or carrier of regulatory news and public statements on trading and share ownership, which companies are required to make under the market's listing and corporate governance rules.

Financial data company Knowledge Technology Solution (KTS) estimates that RNS lost about 25 per cent of its market share after deregulation ended its monopoly of regulatory announcements in 2002.

But KTS said in March that RNS had stemmed the decline, holding 71 per cent of the market.

RNS's competitors by market share are PR Newswire, Romeike, BusinessWire, CCNMatthew and Hugin.

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