The regulator says firms’ policies should include a clear prohibition on originating rumours and on spreading rumours about competitors to attract new business.
When rumours are passed on internally and externally the origin of the information must be sourced, where possible.
The information must also be clearly stated to be a rumour, with no additional credence or embellishment and it must be made clear that the information is unsubstantiated.
The FSA says staff should be given training on how to deal with market rumours and firms’ communications and trading should be actively monitored.
Alexander Justham of the markets division says: “Spreading false or misleading rumours about companies, particularly in volatile or fragile market conditions, can be a very damaging form of market abuse. While we pursue individual cases of rumour mongering, it is of equal concern to us that market practitioners handle rumours properly and avoid giving credibility to false stories.”