Aviva’s announcement, which occurred on 8 March 2018, concerned the firm’s preliminary year-end results and gave the impression it intended to take action to cancel at par value certain preference shares.
Preference shares were trading above their par value at the time, therefore the statement caused concern that holders would incur losses on cancellation.
“Firms must ensure that announcements to the market are clear and not misleading. But for Aviva’s prompt clarification and the payment scheme, this case could have led to a financial penalty.”
“We recognise the uncertainty created for preference shareholders two years ago whilst we were considering our options and we subsequently made discretionary goodwill payments to impacted preference shareholders.”