Are you keeping your investors appropriately updated?


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For those housing associations who have publicly listed bonds, updating the market and your investors is a necessary part of the treasury function.

There has been comment that the social housing sector is not providing the level of reporting and information which is preferred by investors. Investors consider transparency to be an essential part of maintaining confidence in the sector, and most information which investors are looking for should be readily available – it simply requires publication in an investor-appropriate manner.

Issuers will need to comply with requirements contained in the contracts establishing the bonds but also with their obligations under the relevant parts of the Financial Conduct Authority's Listing Rules and under the Market Abuse Regulation.

As with any lending relationship, it will be commonplace, for example, for an issuer to have to provide copies of its annual financial reports to the bond trustee on behalf of investors. However, the issuer will also need to ensure that these are released to the market more generally, through uploading them via the National Storage Mechanism and also through publication on a regulated information service. Most issuers from the housing sector opt to publish relevant news via the Regulatory News Service (or RNS), as this is one of the FCA's approved providers. Many issuers also publish information on their website, often using a dedicated investor relations page.

In addition to the annual financial statements, comments from the Investment Association and in the market suggest that many investors would prefer associations to release financial information on a more regular basis. Some issuers in the sector opt to publish quarterly updates. Issuers should be particularly careful that they understand their obligations (and the obligations of their employees and advisers) regarding the publication of "inside information" – i.e. precise information which has not been made public but which relates to an issuer of securities and which, if made public, would be likely to have a significant effect on the price of that issuer's bonds. In the context of a bond issuer that is on-lending the proceeds of the issue to other members of its group, this is likely to include information which concerns those other members

There are some circumstances where an issuer (or other members of its group) may have to prevent the disclosure of inside information where disclosure might prejudice its legitimate interests. There are strict controls around when this is permissible, one of which is that the issuer must be able to ensure the confidentiality of the information whilst withholding it from the market. Insider lists should be prepared and kept up to date to ensure confidentiality is maintained. This becomes even more important in potentially tricky situations where a significant corporate event (such as a merger, or perhaps a resignation) is in the early stages of consideration and must be carefully managed.

If an investor is inadvertently made an "insider" (i.e. given inside information before it becomes publicly available) and then deals in the relevant securities then they may well commit an insider dealing offence, which is to be avoided!

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