Enquiry Letters from the FCA - Investigations into Market Announcements and Inside Information


The increased availability of data and advanced analytical systems capable of efficiently crunching that data have meant that the FCA is able to more proficiently detect abnormal share price movements by comparing data before and after the publication of any major, unexpected or market-moving announcements. If the FCA does detect abnormal activity, it is likely the FCA’s Market Integrity Unit will write to the issuer enquiring as to whether the contents and/or timing of the announcement may have contributed to the share price movements.

An enquiry letter, where the company is unable to satisfy the FCA’s concerns, may lead to a formal investigation being opened which may cover both civil and criminal offences and, if proved, action being taken against the listed company and/or its directors, including the possibility of restitution to investors who have suffered loss as a result of the improper content or timing of any announcement. Issuers should be prepared to respond clearly to such enquiries to demonstrate and evidence how they were satisfied that their announcements were accurate, that any inside information was announced as soon as possible, or where it was delayed that they had undertaken appropriate assessments to determine they had legitimate reasons to do so.