High Court declines to restrict "passive" investors from bringing claims under s.90A/Schedule 10A FSMA

The High Court declined to follow the approach taken in Allianz Funds Multi-Strategy Trust v Barclays plc [2024] EWHC 2710 (Ch), allowing claims by "passive" investors, who do not actively manage their portfolios, to continue: Persons Identified in Schedule 1 v Standard Chartered plc [2025] EWHC 698 (Ch).

S.90A and Schedule 10A FSMA impose civil liability on issuers of securities for untrue or misleading statements or omissions in all documents (except prospectuses or listing particulars, where the issuer has potential liability under s.90 FSMA) published to the market via a regulatory information service where a person discharging managerial responsibility at the issuer knew that, or was reckless as to whether, the statement was untrue or misleading, or knew the omission to be a dishonest concealment of a material fact, or where there has been a dishonest delay in publishing relevant information. It is a requirement for a successful claim under s.90A/Schedule 10A that a shareholder must have acquired, continued to hold or disposed of securities in reasonable reliance on the published information to which the claim relates.

Price/market reliance claims

As was the case in the Barclays claim, the reliance claims in the Standard Chartered case fall into three broad categories:

1. Claimants who read and relied upon the relevant information directly;
2. Claimants who read and relied on the relevant information indirectly through other sources, such as the reports of brokers or financial analysts; and
3. Claimants who relied on the relevant information because their investment processes proceeded on the basis that Standard Chartered’s share price would reflect the contents of the published information; and (b) their investment decisions took account of Standard Chartered’s share price and its movements (referred to as “price/market reliance"). This category includes index or tracker funds which invested in shares based on tracking of an index like the FTSE 100 and trading decisions made based on algorithms.

In the Barclays claim, Leech J struck out the third category of Claimants, holding that funds with "passive" investment strategies based on index tracking could not meet the reliance test and therefore had no cause of action under s.90A/Schedule 10 FSMA.

Standard Chartered similarly sought to strike out the third category of Claimants. However, Green J declined to follow the approach of Leech J. Green J did not consider it was necessary to determine the meaning of "reliance" under s.90A/ Schedule 10A FSMA, in order to determine the strike out application. He acknowledged that, pursuant to the principle of judicial comity, if he was deciding upon the meaning of reliance, he would be bound to follow Barclays because he is not "convinced" it is wrong. However, he decided to defer his decision upon the meaning of reliance to trial, declining to strike out the price/market reliance Claimants.

Delay claims

In the Barclays claim, Leech J held that a claim under Section 90A for dishonest delay is contingent upon the actual, albeit delayed, publication of information. If an issuer never publishes information that they are obliged to, then the only cause of action available is for an omission, provided the claimants can prove reliance and causation. As the claim relied solely on the absence of any publication about certain matters, rather than any subsequent, late publication of the information, the court held there was no compelling reason to permit the dishonest delay claims to go to trial as they had no real prospect of success.

In this claim, Green J noted his doubts about Leech J's above conclusions, and their applicability to the Standard Chartered claim, determining that it would be better to determine this novel point of law on the basis of the actual facts at trial, rather than assumed or hypothetical facts. He therefore declined to strike the delay claims out.

Note: In July 2025, the Court of Appeal allowed the defendant's application for permission to appeal. The Court of Appeal hearing was due take place on 20/21 January 2026. However, in December 2025, the parties reached a confidential settlement in the case.