Editors rail against FSA rules

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Clampdown on the press will harm financial confidence

The editors of the FT, Times, Guardian and financial news service Thomson Rueters have written an open letter to Financial Services Authority (FSA) boss Hector Sants demanding an end to a clampdown on media reporting.

They complain about proposals to treat all journalists’ enquiries as potential insider trading, to record all media calls and have press officers present and recording all media interviews. The proposals were set out in Issue No.37 of “Market Watch”, dated September 2010.

The four editors claim the changes will “injure the market integrity they purport to protect.

Accurate and timely information

“Properly functioning financial markets rely on the flow of accurate and timely information, available to all participants simultaneously,” they write, claiming the media “play a key role in protecting investors and other market participants by inhibiting the creation of an unlevel and unfair market place.” The editors add: “The proposal that all contacts between journalists and regulated firms should become subject to a prior screening process is disproportionate and unacceptable.

“Regulated firms will find it much easier to hide behind bland press releases that conceal inconvenient corporate realities and there is a heightened risk that journalists will feel compelled to publish unconfirmed reports and rumours, increasing the flow of misinformation.

Countering spin

“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 or spin.

“By adopting an overly prescriptive approach to preventing leaks, the recommendations would greatly restrict the capacity of the media to carry out investigations of regulated firms.”

And the editors complain: “These recommendations, although targeted at contacts with the media, have been drafted and issued without any prior consultation with the media, contrary to the Better Regulation Task Force - Five Principles of Good Regulation, published in 1997.”