Clifford Chance
UK Financial Services Authority Market Watch 37 – preventing leaks to the media
10 January 2011
The UK Financial Services Authority (FSA) is stepping up its efforts to tackle the leaking of insider information on pending corporate transactions with the publication of a series of recommendations to help regulated firms and issuers to strengthen their policies and procedures.
The FSA's recommendations were published recently in its newsletter Market Watch 37.
One of the main issues highlighted by the FSA has been strategic leaks to the media. The FSA's investigations have led it to believe that, in some instances, such strategic leaks have been sanctioned by issuers or their advisers to help them gain a tactical advantage during a takeover.
The FSA has also concentrated its efforts in highlighting what it believes to be flaws in the policies and procedures of firms.
The UK regulator has set out its views on what firms should do to establish a strong anti-leaking culture in their organisations and how they should respond to leaks.
In particular, the FSA has provided detailed suggestions on its expectations of what an internal review of a leak should comprise.
The recommendations on preventing leaks of insider information to the media reveal the strength of the UK regulator's concerns.
However, the FSA has also created a complex set of management and operational challenges that regulated firms and issuers will need to address in their efforts to adopt the recommendations in Market Watch 37.
This article is based on Clifford Chance's client briefing, Stopping and Fixing a Leak: MarketWatch 37, published in October 2010.
