LONDON (Reuters) - The editors of the Financial Times, Guardian, Reuters and the Times urged Britain’s markets watchdog to scrap “misguided” anti-leak rules that will curb journalists’ contacts with bankers and executives.
Last month, the Financial Services Authority (FSA) told the firms it regulates, such as banks, brokers and asset managers, to adopt media policies to kill “strategic leaks.”
It recommended that firms channel all media enquiries though a press office and ensure contact with reporters was recorded.
But news organisations have attacked the edict as draconian, unlikely to stop committed leakers, and damaging to investigative reporting that makes markets less murky.
In a rare joint letter, addressed to FSA Chief Executive Hector Sants, the quartet wrote that its new rules were “misguided” and “will only injure the market integrity they purport to protect.”
“The proposal that all contacts between journalists and regulated firms should become subject to a prior screening process is disproportionate and unacceptable,” the editors wrote.
“Regulated firms will find it much easier to hide behind bland press releases that conceal inconvenient corporate realities and there is a heightened risk that journalists will feel compelled to publish unconfirmed reports and rumours, increasing the flow of misinformation,” they added.
FT Editor Lionel Barber, Guardian Editor-in-Chief Alan Rusbridger, Thomson Reuters (TRI.N) (TRI.TO) Editor-in-Chief David Schlesinger and Times Editor James Harding called on the FSA to “reconsider and revoke” its recommendations.
The four also complained that the recommendations were issued without consulting the media, despite British guidelines that recommend new regulations are developed in consultation with those they affect.
An FSA spokeswoman reiterated that its newsletter was in response to concern from companies and investors, and said obligations to keep inside information confidential had not changed.
“We have simply reminded firms of their existing obligations and provided best practice views around systems and controls,” the spokeswoman said.
The co-ordinated action recalls battles that some of the same groups have fought over protecting sources and to exempt financial journalists from European “market abuse” rules that could have led to criminal sentences for mistakes in reporting.
In December the European Court of Human Rights ruled that the Guardian, FT, Independent, the Times and Reuters were right to protect their sources and refuse to hand over leaked documents about a possible beer industry takeover in 2001.
Interbrew, now part of Anheuser-Busch InBev NV (ABI.BR), said the documents about a potential South African takeover were falsified and had won UK court judgments ordering the five groups to hand them over.
The FSA ran its own two-year probe but in 2003 decided it was “not the appropriate authority” for the case.
Reporting by Quentin Webb. Editing by Chris Wickham and Robert MacMillan