Abnormal share price changes at 10-year low

Elizabeth Fournier
UNUSUAL share price changes in UK companies ahead of a deal announcement have fallen to a decade low, but still take place in a fifth of cases, according to new data from the City watchdog yesterday.

In the Financial Services Authority’s (FSA) final annual report before it is split into two new regulatory bodies, it said that abnormal price movements – a key measure of “market cleanliness” – had fallen to 19.8 per cent in 2011, down from 21.2 per cent the previous year and the lowest on record since 2003.

The figures suggest that the watchdog’s recent clampdown on market leaks, which have seen it make several high profile market abuse prosecutions, has had a positive impact.

“Over the last four years, the FSA has changed radically its prudential supervisory approach, fixing the deficiencies which became clear in the financial crisis,” said chairman Adair Turner.

The report also showed that employee turnover at the FSA is down – falling from 10.8 per cent to 9.8 per cent over the year.

Outgoing chief executive Hector Sants was the highest paid member of staff last year, with a total pay package of £835,731. But he declined his performance-related bonus for the 15 months to the 31 March, instead donating £143,750 to The Art Room, an Oxford-based charity supported by the Duchess of Cambridge.

The FSA will be split early next year into the Prudential Regulation Authority and Financial Conduct Authority.