FSA: Ex-dividend dates and the Market Abuse Regime

05 October 2012

The timing of an issue being marked ex-dividend relative to a derivative's expiry date can be a major determinant of that derivative's value; of particular significance is whether the ex-dividend date falls before or after an expiry.

Although dividend timing may not be inside information relating to the underlying equity (where that instrument is a qualifying investment admitted to trading on a prescribed market), it may in some cases be inside information in relation to single stock and equity index futures and options (where these derivative instruments are related investments) for the purposes of market abuse regime provisions in the Financial Services and Markets Act 2000 (‘FSMA’).

It is possible that some issuers are not considering whether information about ex-dividend dates is inside information in relation to a related investment and have therefore been willing to give out such information on an ad hoc basis before releasing it to the market via an RIS, without considering the market abuse regime provisions in FSMA.

Full text

© FSA - Financial Services Authority