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High Profile FSA Final Notice Breach of DTR 5.8.3R
A recent high profile case, details of which were published on the Institute of Chartered Secretaries and Administrators (ICSA) website, serves as a reminder as to the importance of substantial shareholders declaring their interests in full and in a timely fashion, reports company compliance and corporate support firm London Registrars (http://www.london-registrars.co.uk/).
In August of this year, the FSA published a final notice which imposed a penalty of £210,000 on the former chairman of Wm Morrison Supermarkets Plc, Sir Ken Morrison, for a breach of DTR 5.8.3R. The FSA’s guidelines state DTR 5.8 to be “procedures for the notification and disclosure of major holdings”, with DTR 5.8.3R stipulating that “the notification to the issuer shall be effected as soon as possible”. The final penalty notice stated that between 16 September 2009 and 21 June 2010, Mr Morrison's voting rights in Wm Morrison Supermarkets Plc had fallen below 6%, 5%, 4% and 3%. It went on to state that Mr Morrison failed to notify the company of the transactions causing the reduction in voting rights until 1 March 2011, which led to the company not being in a position to update the market in accordance with DTR 5.8.12R(1) of FSA guidelines. This meant that Mr Morrison’s level of shareholding was not listed correctly in the company’s annual report placed on 31 January 2010. Both the significant delay in making the required notification and Mr Morrison’s prominent position were taken into account by the FSA when considering the failings and levying the penalty.
While this is a particularly high profile case, it does serve to remind all substantial shareholders of UK companies the importance of DTR 5.8. London Registrars assists with company compliance in this matter, managing the register where substantial shareholders declare their interests, as well as generally advising on when declarations must be made, including in cases where directors are also substantial shareholders.
This is just one area of corporate governance and legal support offered by London Registrars, which also provides company secretarial services. For further details on the full range of services, go to http://www.london-registrars.co.uk/.
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