UK Watchdog Censures Aviva for Listing, Transparency Rules Breach -- Update
October 26 2020 - 8:21AM
Dow Jones News
By Sabela Ojea
The Financial Conduct Authority censured Aviva PLC on Monday for
a listing and transparency rules breach, saying that an
announcement regarding preference shares posted by the FTSE-100
insurer had the potential to mislead the market.
The U.K. regulator said the announcement Aviva published in
March 2018 included comments that gave the impression it was going
to take action to cancel at par value certain preference
shares.
"At the time, the preference shares were trading above their par
value and so the statement caused concern that holders would incur
losses on cancellation," the FCA said. It said the market price for
Aviva's preference shares fell between 20% and 26% when the market
closed.
Shareholders sold preference shares at the above par market
price because of those comments, the FCA said. However, Aviva
established a payment scheme for the preference shareholders that
sold their shares at a lower share price a week later.
Because of these rapid measures, the FCA said it considers that
Aviva's breach was serious but not intentional, while ensuring that
this lack of clearness could have led to a financial penalty.
"This was a disappointing episode for which we are sorry and
lessons have been learned. We recognize the uncertainty created for
preference shareholders two years ago," Aviva said.
Aviva shares at 1150 GMT were up 4.80 pence, or 1.7%, at 282.90
pence.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
October 26, 2020 08:06 ET (12:06 GMT)
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