Being a financial reporter in London is going to become a lot less lucrative for some journalists.
    The government is announcing new legislation that will require journalists to alert viewers and readers when they are chatting up stock in a company in which they hold shares.
   Under the new rules journalists will have to declare whether they have an interest in shares or other financial instruments that they recommend or offer investment advice on.
    In adopting the new rules, government officials chose to ignore pleas for continued self-regulation by newspaper editors.
    What's prompting the new rules is concern over a repetition of last year's stock scandal at The Mirror, one of Britain's best-selling tabloids.
      The scandal at The Mirror sent a shock wave through financial journalism and cast a cloud over Piers Morgan, the newspaper's editor. 
   The scandal erupted when it was found that Morgan had bought shares in the company Viglen Technologies just one day before the stock was recommended in the paper's popular City Slickers column. 
   An internal inquiry cleared Morgan of any wrongdoing, but James Hipwell and Anil Bhoyrul, the two City Slickers columnists responsible for writing the tipster article, were sacked after it was found that they too had bought shares in the company before they promoted it as an investment opportunity.
     Under existing law, journalists are exempt from the controls of the financial regulators. Although insider trading rules do still apply, this rarely affects so-called share-tipping, since inside knowledge is not usually involved in boosting the price of certain shares through publicity.
     Nevertheless, journalists are expected to adhere to voluntary codes of practice as governed by the Press Complaints' Commission, the newspaper industry regulator. 
   Both writers and editors must declare any relevant share holdings, and publishers can be held liable if they have not put in place the proper procedures to ensure that interests are declared.
     In reality, no national newspapers currently publish declarations of interest in articles, although several do claim to keep internal records.
     Les Hinton, executive chairman of Rupert Murdoch's News International, and Chairman of the PCC's Code of Practice Committee, says the government has reneged on its promise to consult the industry before imposing statutory controls.
    The PCC attacked the government's plans for the legislation, saying that it was wrong in principle and unworkable in practice.
    It also said that the legislation would infringe on freedom of expression and undermine the principle of self-regulation in the newspaper industry.
     Nevertheless, the legislation is expected to be approved without opposition.

-Simon Bond covers European media for Media Life, writing from outside of London.

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