Liability of issuers in connection with published information – an extension of the regime

Issuers of securities admitted to trading on regulated markets are liable for fraudulent misstatements in periodic disclosures to the market. They are also liable for any dishonest concealment of a material fact in such publications.

The Financial Services and Markets Act 2000 (Liability of Issuers) Regulations 2010 (Regulations) extends the regime. The impact of that extension is that:

• issuers will be potentially liable to persons who dispose of, or continue to hold, securities in addition to those acquiring securities;
• liability will also be incurred for dishonestly delaying the publication of information; and
• the regime will cover all information published by issuers (or the availability of which is announced by the issuer) by means of a recognised information service (RIS).

This is a separate liability to that attached to untrue or misleading statements in, or omissions from, information published in listing particulars or a prospectus.

The new regime will apply to information first published on or after 1 October 2010. Is your organisation aware of the changes? Wragge & Co's Financial Services team has prepared an expert analysis of the regulations.