The Financial Services Authority (FSA) is to begin reviewing prospective primary information provider (PIP) applications as part of its move to end the monopoly of the London Stock Exchange on company news announcments.
PIP services tendering for the UK market news dissemination contracts include the LSE's own Regulated News Service (RNS), Business Wire, Hugin Online, Newslink, Pims, PR Line, PR Newswire and Waymaker.
Ken Rushton, Director of Listing at the FSA, says: “I am pleased that there was so much interest from firms wishing to be considered for approval as PIP services. The whole point of our proposals was that competition should bring real benefits for listed companies, especially in terms of technological improvement and transparent costs. The other key benefit is that listed companies will be able to choose one provider for all their regulatory and investor relations information."
FSA requirements are designed to ensure that the provision of regulatory announcements, such as mergers, financial results or directors dealings, to the market will remain of a high standard. The FSA has set detailed service standards to which all prospective PIP services will have to adhere. Applicants will have to submit themselves to an external audit to ensure they meet all of the FSA minimum standards.
The FSA expects to publish a list of approved PIP services in January 2002 and the new competitive system should be switched on in February 2002.
Competing PIP services will disseminate regulatory news to secondary providers or SIPs (secondary information providers). Those SIPs who have already indicated that they would provide aggregated regulatory information include AFX News, Bloomberg, Hemscott.net, the London Stock Exchange (through their Web site), Reuters and Thomson Financial. These secondary providers intend to collate all regulatory news from the PIP services and make the complete range of announcements available on their systems.