FSA to open RNS to competition

FSA to open RNS to competition

The Financial Services Authority has unveiled plans to relieve the London Stock Exchange of its monopoly on company news announcements.

The UK regulator says it will approve competing information providers to perform the role that is currently undertaken solely by the Regulatory News Service (RNS) of the London Stock Exchange.

Michael Foot, managing director of the FSA, says the move will make information dissemination cheaper for the market as a whole. The FSA estimates that the total cost of the proposed competitive model to the market as a whole is £3,192,000. This compares with the FSA’s estimate of the total cost for RNS of £5,600,000 per annum.

"Listed companies should also benefit from a more transparent and fair pricing structure for their listing needs and from being able to choose the information provider that can offer them the best deal," adds Foot.

Andrew McStravick, director of operations at the London Stock Exchange, says: "The introduction of a competitive environment for the release of company news, makes sense as long as the high standards set by the Exchange's news service are rigorously enforced among all suppliers," he adds. "We believe RNS is well-positioned to develop cost effective services, to the benefit of the market as a whole."

Under the FSA’s proposals, listed companies would be able to publish their regulatory announcements, such as mergers, acquisitions, financial results or directors’ dealings, through a choice of FSA approved primary information providers (PIPs).

Preliminary discussions have been held with a number of potential PIPs, including the London Stock Exchange, PR Newswire, Businesswire, Hugin Online and Ubiqus. Each approved provider will be able to compete freely with other providers for the custom of listed companies.

RNS currently releases 170,000 announcements each year, which are distributed to over 250,000 professional terminals worldwide.

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