THE recent controversy about the selective release of information by companies coming to the stock market has spurred the Financial Services Authority (FSA) to arrange a round- table discussion to decide if its rules need amending.
Last month’s flotations of Premier Foods and Virgin Mobile were marred by rows about the restricted access to company information contained in draft-listing particulars. These documents are circulated to City professionals in the weeks leading up to the first public trading in a company’s shares.
Virgin Mobile’s lawyers refused to allow the company to make its listing particulars available to the press, unless they first agreed to sign a restrictive agreement preventing the publication of any details.
Lawyers acting for Premier Foods called on the FSA to investigate Andy Brough of Schroders and Tim Steer of New Star Asset Management after the fund managers wrote critically about the company in their Judgment Day column for The Sunday Times. Some of their criticisms were based on financial information in the listing particulars, which might not otherwise have been publicised.
In both cases, a narrow interpretation of the rules was seen by some to hamper a full and frank debate of the true value of the companies coming to the market. The rules are supposedly designed to protect unsophisticated private investors — yet these investors can buy shares in the companies from the moment they start trading.
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An FSA spokeswoman said: “It’s not an area where there’s been any controversy before, but a couple of recent flotations have raised questions.
“We are inviting a number of participants, both brokers and investment managers, to a meeting to better understand how draft-listing particulars are dealt with. It will allow us to think about whether there’s anything we need to do to change our current approach.”
The meeting, called by the FSA’s director of markets, Gay Huey Evans, is set for mid-September.