The FSA has written

to the CFOs and FDs of smaller cap listed companies in its capacity as the UK Listing Authority to remind them of their obligations under the Listing Rules (LRs) and the Disclosure and Transparency Rules (DTRs) and to draw their attention to areas that FSA thinks it may be advisable for them to focus on.

Companies subject to the LRs are reminded that they are required to establish and maintain adequate procedures, systems and controls to enable them to comply with their obligations under the LRs and the DTRs (Listing Principle 2, LR7), in particular, the obligation to disclose information to the market in a timely and accurate manner. LR7 also sets out the identification and escalation processes expected of a listed company with a primary listing of equity securities.

The letter includes a non-exhaustive list of factors that the FSA might take into account when considering whether a company's identification and escalation processes are adequate. The FSA also states that a company's identification and escalation processes should not be undermined by the need to disclose price sensitive information outside the company's normal reporting cycle. Companies' reporting systems should also be able to cope with the accelerated reporting timetables brought about by the implementation of the Transparency Directive in the UK.

Finally, companies are reminded of their general obligations under the DTRs and LRs to maintain control over access to inside information and their disclosure requirements in respect of, or even restrictions on, dealings undertaken by persons discharging managerial responsibility.

See also the guidelines published recently by the GC100 in relation to complying with the Listing Rules and Disclosure and Transparency Rules.