Insider information: listed companies require guarantees

Solicitors acting for listed companies will need to maintain a list of all staff who could have access to insider information - including those simply working the photocopier - under EU rules that come into force this week, a leading solicitor has warned.


Jonathan Davies, a partner at London firm Reynolds Porter Chamberlain, said the new Market Abuse Directive could place a heavy burden on lawyers and other professional advisers.


Under the legislation, law firms will be required to keep the list of staff for at least five years, with advisers under an obligation to note when a member of staff comes off the list because they are no longer dealing with sensitive information.


Mr Davies said: 'The Financial Services Authority (FSA) requires listed companies to obtain guarantees that their advisers' lists are fully compliant. Solicitors will have to revise their terms of engagement with all their listed company clients.'


Mr Davies warned that failure to maintain the lists would amount to a breach of the FSA's rules, with a possible unlimited financial penalty.


He added: 'News that the EU and FSA are to force so many businesses into an endless cycle of record keeping is going to cause a lot of dismay and consternation.'