The FSA principles, which were drawn up by industry practitioners representing different areas involved in M&A activity (such as issuers, corporate finance houses, lawyers, accountants, public relations firms and financial printers), highlight the importance of restricting access to price sensitive information. They are voluntary and are aimed at the unregulated community.

The areas previously highlighted by the FSA as requiring most attention to help mitigate the risk of leakage of inside information include the need for greater vigilance overall to restrict the number of insiders, proactiveness when leaks occur and the need to have robust IT controls. The principles target these areas, and the FSA says that working with the industry to reduce the leakage of price sensitive information relating to M&A activity is a core part of its strategy for tackling market abuse.

“I am extremely pleased to observe the heightened industry awareness and dialogue in relation to the risk of leakage of information on M&A deals,” said Alexander Justham, FSA director of Markets. “It is important that the FSA continues to engage in partnership with the industry on these matters; in particular, I would like to see more efforts to crack down on the length of insider lists and to see firms giving greater focus to the importance of leak enquiries. I want to thank the industry practitioners who worked with us to draw up the Principles of Good Practice, which will be a vital element of our endeavours to combat insider dealing.”

Adam Kinsley, director of Regulation at the London Stock Exchange, said, “We support the FSA and the industry bodies who drafted this guidance, and share their objective to ensure that UK markets continue to be regarded as well-regulated and clean. These principles published by the FSA today provide helpful guidance to anyone who comes into contact with inside information. They will help ensure the UK remains a world-leading financial centre with high standards and good practices.”