The Financial Conduct Authority (FCA) has flagged some potential risks for issuers and regulatory information services (RISs) posed by the inclusion of multimedia content in regulatory news announcements and set out its expectations for mitigating those risks.

The issue

The warning comes in response to a new practice in the market whereby some RISs are offering issuers the ability to include multimedia content, including audio and video content, in regulatory news announcements.

While multimedia content might be appealing from a corporate communications perspective, the FCA has stated¹ explicitly that multimedia content should not form part of any regulated information submitted for dissemination via an RIS.

Regulated information is information which an issuer is required to disclose under Disclosure Guidance and Transparency Rules (DTR), articles 17 to 19 of the UK Market Abuse Regulations (MAR) or the Listing Rules.

What are the FCA's grounds for concern?

The FCA highlights regulatory requirements which it considers could be breached, or more easily breached, by using multimedia in regulatory news announcements.

• DTR: communication of regulated information to the media to be in unedited full text: DTR 6.3.5 R requires an issuer to communicate regulated information to the media in unedited full text. Similarly, DTR 8.4.22 R requires an RIS to disseminate regulated information in unedited full text as submitted to it and in an industry standard format.
• MAR: inside information and marketing: MAR 17(1) requires an issuer not to combine the disclosure of inside information with the marketing of its activities. Whilst the risk of breaching this requirement already exists for regulatory announcements in text format, the FCA believes that the risk may be heightened by the inclusion of multimedia content which may be subject to less diligence. Issuers must be alert to this risk and ensure that any announcements with multimedia content are compliant with MAR.

More generally, the FCA notes that there is a risk that splitting the information being disclosed in a regulatory announcement between text format and multimedia could mislead market users (e.g. if the multimedia content leads to the regulated information becoming misrepresented or distorted).

What does this mean in practice?

Issuers should ensure that multimedia content does not form part of any regulated information submitted for dissemination via an RIS, as well as being alert to the wider issues flagged by the FCA.

The FCA also expects RISs offering a multimedia facility to consider how they can mitigate the new risks to which their clients are exposed. 

The FCA will continue to monitor the use of multimedia content in regulatory news announcements, particularly the inclusion of embedded video content, to assess any developments in the risks it has identified.

1. Primary Markets Bulletin 44, March 2023