Finance regulator issues warning on polling and inside information

The FCA issued a guidance note on its website in response to questions on how the Market Abuse Regulation (MAR) could apply to information obtained via electoral polling.

If polling companies disclose inside information prior to publication, this would be an offence under MAR, other than “where necessary in the normal exercise of employment, a profession or duties”, according to the watchdog.

The FCA gave the example of a polling firm that is due to publish results that are likely to affect the price of government bonds traded on regulated venues and meet the other criteria to be classified as inside information. In this scenario, it would be an offence under MAR to share the information prior to it being published, and could also be an offence for anyone privy to it to trade in the relevant bonds ahead of the publication.

Inside information is defined by the MAR as “information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.”

The regulator said it encouraged companies to take legal advice on the issue, where appropriate, when it comes to determining whether something constitutes inside information.

“It is important to note that all firms and individuals – regardless of whether they carry out regulated financial services activities – fall in scope of our regulatory remit on market abuse,” the FCA said in the statement.