Reuters plans to open briefings to press

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The Independent Online
REUTERS, the leading global financial information and transaction provider, is on the verge of becoming the first UK company to end the City practice of giving private briefings to fund managers, major investors and industry analysts.

If Reuters' management - led by chief executive Peter Job - goes ahead with the plan, future presentations, including the company's semi-annual briefings on earnings, would be open to press and investor scrutiny. Initially, access is likely to be facilitated via live telephone conference calls, but the rise of the Internet will soon facilitate real-time video feeds over the web to investors around the world.

Reuters and its US counterpart Dow Jones, publisher of the Wall Street Journal, have discussed plans for greater transparency with Arthur Levitt, chairman of the US Securities and Exchange Commission. Around 20 per cent of publicly-listed companies in the US already provide open access to their briefings to the press and small investors, usually through telephone conference calls.

"We have been seriously looking at this for some time," said a source at Reuters. "It's quite possible we'll be doing something very soon."

Reuters stock plunged 15 per cent last week in a matter of hours, its biggest one day fall this decade, after the company briefed analysts in New York about its Instinet electronic broking unit and other online operations. Several analysts subsequently downgraded earnings forecasts, even though Reuters denied issuing price-sensitive information.

It is understood that the company is about to embark on a City campaign to explain its plans to institutional shareholders and analysts. A letter explaining the new disclosure practice is expected to be sent within days. "There will be opposition to this," said one analyst. "It's a radical move. But it's technologically possible and it will happen."

The London Stock Exchange is investigating trading irregularities in the wake of last Thursday's share price collapse. Exchange officials refused comment.

"I think the trading wholesalers in London always fear that there's not always a level playing field on all information," said an equities trading director.

"In a private meeting a slight gesture to a well clued analyst is all it takes for some one to be ahead of the game and it becomes self feeding: the share price reacts and the market anticipates that something was said at a private briefing and it accelerates out of control."

He added: "Look at what happened to Reuters last week."