UK Watchdog Censures Aviva for Listing, Transparency Rules Breach -- Update

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 [e-mail]; @sabelaojeaguix

(END) Dow Jones Newswires

October 26, 2020 08:06 ET (12:06 GMT)

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