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Private investors often
feel they are being prejudiced by not receiving all the information
available to institutions and other market professionals such as analysts;
or that they receive the information that is published somewhat later. The
prices of stocks are obviously influenced to a large extent by news of
various kinds, whether it is the latest "trading statement" or simply useful
background information that may affect one's view of the company versus it's
competitors.
Over the years the disclosure of "price
sensitive" information (ie. that which is likely to affect the price of the
stock) has become more regulated in the UK, but it still does not meet the
standards of probity and transparency that occur in other markets such as
the USA. Private disclosures to analysts or the company's stockbrokers are
still made at closed meetings by company managers, which are then passed on
only to favoured clients. The enforcement of what rules there are on the
disclosure of information is also not enforced as vigorously as it could
be. As an example, the writer once complained to a company chief executive
by telephone that information given at an analysts meeting should have been
made public. The excuse was that he was under some stress as he was
suffering from a brain tumour with a poor prognosis - again this information
had not been made public so the enquirer was now a party to "inside"
information which he could neither use nor disclose until the company did.
Clearly the chief executive had little understanding of the disclosure
rules!
One thing that has
changed for the better though is that UK Regulatory Announcements (ie. those
announcements that must be made public) are now available on the internet
and can be picked up by the private investor (or automatically received via
email) as soon as everyone else sees them, or nearly so.
UKSA would like to see a
fairer and more equitable distribution of information. A foundation would be
as follows (note that good companies already manage to do many of these
things):
- Publication of all analyst presentations on
the internet as soon as they are presented (plus a video of the meeting
including the question/answer session in real time which is left available
for viewing thereafter).
- Copies of all company news and press
releases, plus all annual and interim reports to be placed on the company
web site as PDF documents.
- Minutes of all meetings with analysts or
stockbrokers where information on company performance or trends is given to
be supplied on the company web site within 24 hours and noted in an RNS
notice.
A letter from UKSA to
the FSA on company announcements is in the following file:
Company_Announcements_2001, and
we also submitted comments on this subject as part of the Company Law Review
in 2005 - go to: Company_Law |
