It is the first time financial PR has come under scrutiny from the FSA, and means agencies will have to look at the security of their IT systems, train employees about inside information and maintain formal personal dealing policies.
Although the principles were not drafted with a view to becoming legally binding, it is expected agencies will operate within these boundaries.
'This provides an intelligent wake up call to the industry,' said College Hill chairman and PRCA board member Alex Sandberg, who co-ordinated much of the industry response to the FSA.
The principles were drawn up after an FSA review surrounding public takeovers last year suggested non-regulated bodies did not have enough control over sensitive information (PRWeek, 6 July 2007). As such, the principles are not aimed at just PR agencies, but also financial printers, lawyers and other unregulated bodies that handle sensitive deal information.
'Given these are aimed at a wide variety of disciplines, it is important to note that not all principles will be relevant to PR agencies,' said FSA market conduct team manager Ruth Gevers. 'Our review noted there were areas of weakness in terms of confidentiality. This is not about us regulating the PR industry, it is about making a difference.'
The FSA looked at the operations of seven PR agencies and conducted meetings held at College Hill's offices with leading practitioners, including Hudson Sandler founder Mike Sandler, Maitland founder Angus Maitland and Tulchan founder Andrew Grant.
'The reality is that self-regulation is the only way of regulating this industry,' said Grant. 'But we are already regulated - if as practitioners we engage in practices that lose client confidence, then we don't have a business.'
Industry insiders suggest the FSA is keen to make an example of a PR agency that has leaked sensitive information, but that it has yet to find one. The FSA said it was not regulating agencies but the principles would provide a guide to all non-regulated bodies.
HOW I SEE IT - ALEX SANDBERG, CHAIRMAN OF COLLEGE HILL AND PRCA BOARD MEMBER
An intelligent outcome, so credit where it is due. The FSA helpfully demonstrated that our industry can work well together.
It is important to note the document is neither a prescriptive nor a legal one. The FSA has stated it will not police it, nor does it want to regulate us. That puts the ball firmly into our court.
It is hard to do what we do and argue against the six sensible principles. The examples within the document are illustrative only and are widely implemented already. But the message is clear - we are recognised to be deep in the flow of 'insider information' and regulating ourselves comes with that territory.