Editors criticise FSA plan to police relations between press and City
[QUOTE] Editors criticise FSA plan to police relations between press and City
Measures designed to prevent exchange of inside information are 'misguided', newspaper editors say in letter to City regulator
Four editors, including the Guardian's editor-in-chief Alan Rusbridger, have written to the FSA, the City regulator, criticising proposals to police relations between the media and quoted companies.
The letter is also signed by Lionel Barber, editor of the Financial Times, Times editor James Harding and David Schlesinger, editor-in-chief of Thomson Reuters.
They warn the FSA's chief executive Hector Sants that measures designed to prevent the exchange of inside information are "misguided" and will have the opposite effect to that which the regulator intends.
They include proposals to record telephone calls with journalists and monitor all contact between reporters and company representatives by subjecting them to a screening process.
The letter describes the latter proposal as "disproportionate and unacceptable".
The recommendations were put forward by the FSA's "markets division", which is responsible for ensuring that listed companies meet their legal obligations.
The editors warn in their letter that the proposals "reflect a wilful misunderstanding of the relationship between the City and the press" and "will ultimately do more harm than benefit to the flow of reliable information".
They argue that if new rules are enacted the companies regulated by the FSA "will find it much easier to hide behind bland press releases". The letter adds: "Journalists will feel compelled to publish unconfirmed reports and rumours, increasing the flow of misinformation."
The letter says the media is part of the solution to insider trading rather than part of the problem. "Journalists and the media play a key role in maintaining a level playing field in the market by unearthing and disseminating information – including material that companies seek to hide, obscure of spin... More public scrutiny of their transactions is required, not less".
Similar measures introduced in the US have little effect, the letter says.
The recommendations have been drafted without consultation with the media and should be revoked, it concludes.
"It is vital that financial journalism can continue its important role in informing investors and market professionals and thereby contributing to the transparency and integrity of the UK's financial markets".
• To contact the MediaGuardian news desk email editor@mediaguardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.
• If you are writing a comment for publication, please mark clearly "for publication".
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[QUOTE] Editors criticise FSA plan to police relations between press and City
Measures designed to prevent exchange of inside information are 'misguided', newspaper editors say in letter to City regulator
- James Robinson
- guardian.co.uk, Tuesday 12 October 2010 19.29 BST
- Article history
Four editors, including the Guardian's editor-in-chief Alan Rusbridger, have written to the FSA, the City regulator, criticising proposals to police relations between the media and quoted companies.
The letter is also signed by Lionel Barber, editor of the Financial Times, Times editor James Harding and David Schlesinger, editor-in-chief of Thomson Reuters.
They warn the FSA's chief executive Hector Sants that measures designed to prevent the exchange of inside information are "misguided" and will have the opposite effect to that which the regulator intends.
They include proposals to record telephone calls with journalists and monitor all contact between reporters and company representatives by subjecting them to a screening process.
The letter describes the latter proposal as "disproportionate and unacceptable".
The recommendations were put forward by the FSA's "markets division", which is responsible for ensuring that listed companies meet their legal obligations.
The editors warn in their letter that the proposals "reflect a wilful misunderstanding of the relationship between the City and the press" and "will ultimately do more harm than benefit to the flow of reliable information".
They argue that if new rules are enacted the companies regulated by the FSA "will find it much easier to hide behind bland press releases". The letter adds: "Journalists will feel compelled to publish unconfirmed reports and rumours, increasing the flow of misinformation."
The letter says the media is part of the solution to insider trading rather than part of the problem. "Journalists and the media play a key role in maintaining a level playing field in the market by unearthing and disseminating information – including material that companies seek to hide, obscure of spin... More public scrutiny of their transactions is required, not less".
Similar measures introduced in the US have little effect, the letter says.
The recommendations have been drafted without consultation with the media and should be revoked, it concludes.
"It is vital that financial journalism can continue its important role in informing investors and market professionals and thereby contributing to the transparency and integrity of the UK's financial markets".
• To contact the MediaGuardian news desk email editor@mediaguardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.
• If you are writing a comment for publication, please mark clearly "for publication".
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