UK: Listed Company Announcements - Opening up of RNS to Competition

The FSA has published its feedback on CP92 "Proposed changes to the UK mechanism for disseminating regulatory information by listed companies".

Under the new regime, listed companies will be able to put out their company announcements through any approved primary information provider ("PIP") instead of just through the RNS. The competing PIP services will disseminate regulatory news to secondary providers (or SIPs). It is understood that the SIPs intend to collate regulatory news from all the PIPs and make the complete range of announcements available on their system.

The FSA has published the names of four organisations who are set to join the RNS, currently provided by the London Stock Exchange, as PIPs. These are PR Newswire, Business Wire, Newslink and Pims. The SIPs are thought to be likely to include Bloomberg and Reuters.

PIPs are required to submit themselves to an external audit to ensure they meet the FSA minimum standard. The FSA sent a letter out to listed companies on 25 January 2002 listing the PIPs approved by the Listing Authority. Following a three week consultation period, formal approval by the FSA Board is expected to be granted on 25 February. The new system is scheduled to start on 2 April 2002, with the changes to the listing rules coming into force at the same time. The original start date of January was put back to allow the new PIPs to get ready.

Currently the Listing Rules require all listed companies to issue theirregulatory announcements by submitting them to the Companies Announcements Office of the London Stock Exchange which then publishes the announcements through the RNS. The Listing Rules will be amended to include a new definition of "Regulatory Information Service" which will be any of the approved service providers which will be listed in Schedule 12 of the Listing Rules. Any obligation to notify information will mean notifying information to a Regulatory Information Service.

A listed company will need to ensure that it is contracted with at least one PIP service to enable it to comply with its obligations under the Listing Rules to disseminate regulatory information.

The main concern that has been raised about this change is how the whole market will gain free and easy access to all regulatory announcements by listed companies. The FSA has said that it is confident that at least one website will be available to allow free access to a collated set of announcements from all regulatory information service providers, rather than this information only being available by means of a service that has to be paid for. The FSA is not planning, unless such a website does not emerge, to make the announcements available on its own website.

"© Herbert Smith 2002

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