The Financial Conduct Authority (FCA) has fined Reckitt Benckiser Group Plc (RB) £539,800 for inadequate systems and controls to monitor share-dealing by its senior executives in its own shares. This contributed to late and incomplete disclosure to the market of share dealings by two senior executives.
RB breached key requirements in the listing, disclosure and transparency rules, and failed to identify breaches of the Model Code. The Model Code is designed to ensure that senior executives (persons discharging managerial responsibilities) do not abuse, and do not place themselves under the suspicion of abusing, inside information. There is no suggestion that the senior executives concerned traded on the basis of inside information or deliberately breached the Model Code.
Georgina Philippou, the FCA's acting director of enforcement and market oversight, said:
"Clear and timely disclosure of share dealings is an important way of ensuring that markets are fair and are seen to be fair. RB failed on a number of counts in relation to share dealing by two of its senior executives over a number of years. The FCA expects all listed companies to learn the lessons from this case and to ensure they have the right controls and training in place."
Weaknesses in RB’s systems and controls between July 2005 and October 2012 were compounded by inadequate records and training and left RB unable to properly monitor share dealings made on behalf of its senior executives by third parties.
When RB became aware of the share dealing by its senior executives, it should have notified the market by the end of the next business day but it failed to do so.
The FCA has published information for issuers and senior executives that clearly sets out their responsibilities and obligations under the listing rules, the disclosure and transparency rules and the Model Code.
RB agreed to settle at an early stage of the investigation qualifying for a 30% discount, without which the FCA would have imposed a financial penalty of £771,190.
Notes to editors
- The Final Notice for Reckitt Benckiser Group.
- The Listing Rules and more information on requirements for issuers and individuals.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.