Market misconduct ahead of major takeover deals in London is on the rise, jeopardising the City's status as an international financial centre, the FSA warns.
To combat insider dealing on M&A activity, the regulator measures market cleanliness through the informed price movements (IPM) system which monitors stock price changes ahead of regulatory announcements. In its latest Market Watch newsletter, the FSA revealed the IPM level on FTSE100 merger and acquisitions announcements was 28.6% in 2006 and 28.7% in 2007 – well up on the 23.7% seen in 2005. However, the FSA says IPMs are not a “direct match” for levels of insider dealing; which can also be explained by correct assumptions from analysts and the media, deliberate ‘strategic’ leaks by c...
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