Public companies pay a price for their access to the markets. Most particularly, they are circumscribed in what they can and cannot do without informing their shareholders and the public at large. To date, this has been done by releasing details of what is considered by authorities to be market-sensitive through the Regulatory News Service.
It seems firms listed on the British markets, including many Irish market leaders, are going to be forced to pay for the privilege. With the demutualisation of the London Stock Exchange, the market is feeling the chill winds of competition. One effect is that companies will have to pay for the information they post, even though they have no choice in whether they issue such information.
Worse still, a review of the service says it should be open to more competition and it appears that two rival US-based news services will be allowed to compete with RNS. For public companies, this means they will have to pay three times over for the release of the same information.
For once, companies and investors are on the same side in opposing the plans, claiming it will add to company costs and administrative hassle and make it less easy for investors to find out what is happening with postings presented in different formats on different services. And there is a fear that firms will be less open in what they post since they have to pay.
Dominic Coyle can be contacted at dcoyle@irish-times.ie
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