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 here, and we also submitted comments on this subject as part of the Company Law Review in 2005, see UKSA policy on Company Law.
