Personal investments by Reuters journalists

The section in the Code of Conduct that deals with information reporting and personal investments by members of Editorial states:

  • Before you report on a company in which you or your family has any kind of shareholding or other financial interest you must notify the interest to your manager or bureau chief.
  • You must not deal in securities of any company, or in any other investment, about which you have reported in the previous month.
  • If you are regarded as a specialist in a particular area of business or industry you must notify your manager or bureau chief of any financial interest you may have in that area or industry.

This reflects a minimum standard that was current when the Code was written. The changing industry and regulatory environments require us to uphold even higher standards to protect, defend and enhance Reuters reputation for accurate, unbiased journalism. The following rules supplement the Thomson Reuters Code of Conduct and the two documents must be read in conjunction. Should there be an inconsistency between this Supplementary Guidance and the Code, the Supplementary Guidance will prevail. The guidance applies to all members of Editorial in all media. IFR staff working on regulated activities must ensure that they also observe all SEC policies


Contents

Supplementary Guidance

Reuters will deal with any breaches of these rules through the normal disciplinary procedures in place in the various countries and regions. You should note that certain breaches could attract civil and criminal liability.

The Code and this Supplementary Guidance must be observed in spirit, not just to the letter. The purpose is to avoid any conflict of interests, any compromise of Reuters reputation and any bias (whether real or perceived) on the part of Reuters journalists, whether they be reporters, sub-editors, editors, cameramen, photographers or other employees of Editorial.

1. Investment Disclosure

The Code and this Supplementary Guidance must be observed in spirit, not just to the letter. The purpose is to avoid any conflict of interests, any compromise of Reuters reputation and any bias (whether real or perceived) on the part of Reuters journalists, whether they be reporters, desk editors, editors, video journalists, photojournalists or other employees of Editorial. Reuters will deal with any breaches of these rules through the normal disciplinary procedures in place in the various countries and regions. You should note that certain breaches could attract civil and criminal liability.

No insider dealing

Reuters journalists must not engage in or facilitate inside dealing and must remain cognizant of the possibility of inadvertently doing so.

Avoid conflict of interest

Journalists of all media (and members of their immediate families) must not buy or sell securities of entities about which they have written, commented or reported recently or about which they intend to write, report or comment on in the near future. The test is whether the editorial activity might continue to have an impact on the securities, but at a minimum, there should be 28 days (four calendar weeks) between editorial activity and trading of securities. Immediate family includes spouses or domestic partners and children, plus those individuals over whose holdings the journalist has authority. Ownership of mutual funds will normally not violate this guidance. However, ownership of some sector-specific funds may raise conflict-of-interest issues for some journalists and editors. If there is any doubt, the issue should be raised with a manager.

Avoid short term trading

Although this supplementary guidance cannot prohibit short term trading, it is strongly advised that editorial staff do not engage in short term trading activities of any kind.

Additional Notes

The term “securities”, comprises the full range of financial instruments (including shares, derivatives, contracts for differences and financial spread bets). The term will be interpreted at its widest to include any transaction where the publication of the writing by a journalist/editor may have a potential impact on its financial performance.

  • Where any disclosure of financial interest is required under the Code (e.g. before reporting on a company in which they or a member of their immediate family has any kind of shareholdings or other financial interest), full and frank disclosure of any financial interest is expected, regardless of whether it is direct or indirect interest if there is any potential the editorial activity may affect its performance.
  • Where there is a concern about a potential or existing conflict of interest, a senior editor should instruct a journalist to unwind a transaction or take other appropriate action, such as reassigning the writing or editing to another journalist.
  • In exceptional circumstances Reuters may bear the properly substantiated transaction costs of a mandated unwinding of a position.
  • Under no circumstances will Reuters accept responsibility for any trading loss, including those that may have occurred as a mandated unwinding.
  • Reuters reserves the right to require an affirmative declaration of understanding of and compliance with the Code of Conduct and this Supplementary Guidance at any time, including on employment, assignment, promotion or daily log-on to Reuters system.

2. Investment Advice

Most members of Editorial staff are not subject to formal financial regulation since they don’t offer direct investment advice to individuals. The guidance below sets out our policy on ‘Investment Advice’. Some aspects are straightforward, others are less so. Regulators do not spell out in detail their views on all areas of the subject and news organisations have to interpret what is permissible. Since there is room for interpretation we recommend that you err on the side of caution and seek advice if you are concerned that anything you are doing may amount to offering advice.

Who does this cover?

This guidance covers all Editorial staff within Reuters News -- journalists, analysts, columnists, bloggers, chatroom hosts and any other staff involved in Editorial output. The only exception is for those IFR staff involved in activities that are formally regulated and whose conduct is thus governed by the SEC’s policies and processes.

How do we define investment advice?

European regulators have provided guidance on the factors they weigh up when considering whether someone has provided ‘investment advice’. The essence of this guidance is that if you communicate directly with an individual, make a detailed recommendation about an investment decision, and take into account that individual’s personal circumstances then you may be offering ‘investment advice’. Unsurprisingly, regulators leave themselves plenty of space to interpret ‘investment advice’ more broadly.

What should Editorial staff avoid in personal communications?

In most jurisdictions the direct provision of investment advice is a regulated activity. If you are not formally regulated then, as a general rule, you must not offer advice to potential individual investors.

You should take particular care not to recommend an investment to people you know when you are communicating privately with them. This holds whether you communicate with them in person, over the phone or via email, instant messaging or any other form of electronic communication.

What should staff avoid in their normal Editorial activities?

Occasionally, Editorial staff are asked for personal recommendations by an individual in a public arena -- this might happen in a conversation on a chatroom, via a comment on a blog post, within a live TV discussion, or during a panel debate. If you are being asked something that feels like it might be a request for personal investment advice then err on the side of caution and offer a non-specific answer. Staff engaged in blogging and in chatrooms should take particular care not to be drawn into giving investment advice.

More generally, Editorial staff need to be aware that if they publish or broadcast what appears to be a recommendation on an investment then there is a risk that it could be deemed ‘investment advice’ by a regulator. The smaller the audience for the content the higher the risk of this and the greater the care required of News staff.

What else do I need to take into account?

Defining ‘investment advice’ is not straightforward and a regulator will fall back on general principles when it comes across any ‘grey areas’. Each jurisdiction has its own regulatory regime so it is difficult to cover every eventuality here. However, we take the European Union’s regime to be amongst the most stringent and within it the Financial Services Authority of the UK provides a guide to Principles of Doing Business that gives a flavour of what regulators expect.

Editorial staff should take particular care that they are treating customers fairly and not misleading them over the nature of the information they are giving. In practical terms, there are two ways of minimising the risks of appearing to be offering investment advice:

  • Avoid language that suggests you are advising customers to take a particular course of action:
“Buy now and sell once it has risen 10 per cent” looks like investment advice.
“The fundamentals suggest the stock could rise another 10 per cent” looks more like an expert prediction.
  • Avoid making specific forecasts on the prices of assets unless you really need to.
“Google is heading straight back to $400 by the end of the month” is as specific as you can get.
"Google looks like it is heading lower, some say a lot lower" carries most of the force of the original without offering any ammunition to regulators or potential litigants by avoiding point forecasts, adding an element of doubt, and introducing the notion of others’ forecasts.

This page was last modified 19:13, 18 March 2014.

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