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Share Dealings Notes

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SHARE DEALINGS Strategy by the FCA to protect the market's reputation:

1. Control of share dealings by PDMRs [Model Code, DTR 3]

2. Criminal offences for insider dealing [individuals] and civil offences of market abuse
[individuals and companies]

3. Control and disclosure requirements of inside information under DTR 2 by listed companies

4. Disclosure requirements of share dealing by shareholders [DTR 5.1.2R] and listed companies [DTR 5.812R]

1. Control of share dealings by PDMRs???

LR 9.2.8R: A listed company must require every PDMR, including directors, to comply with the Model Code and to take all proper and reasonable steps to secure their compliance. o If the company is in breach of this provision, FCA can take disciplinary action and impose sanctions under s.91 FSMA. s.96B FSMA: Definition of PDMR o LR 9.2.8AG provides further guidance on this definition: not necessarily restricted just to persons with direct employment or a director's service contract o s.96B(2) and Schedule 11B FSMA: Connected persons of PDMRs The Model Code controls dealings by restricted persons (para 1(f) - PDMRs) in the securities of a listed company. o Restricted persons must obtain clearance from the chairman before dealing (para 3 and 4) o Clearance must not be given during a prohibited period (para 1(e) - a close period (para 1(a) or when there exists a matter constituting insider information) or where dealing is based on considerations of a short term nature (para 3 and 8) o PDMRs must seek to prohibit dealings by their connected persons in a close period (para 21) and take reasonable steps to prevent their connected persons from dealing on considerations of a short term nature There are exceptional circumstances in which clearance may be given in a prohibited period for a restricted person to sell securities (para 9 and 10) - however, they will not apply where the restricted person holds inside information [as opposed to the definition of a close period, which is where there exists any matter that constitutes inside information]. Even if a person is given clearance to deal, the restricted person must still check that they are not committing an insider dealing or market abuse offence (see part 2 below). Procedure: o Response to request for clearance to deal must be given within five business days of the request o Company must maintain a record of the response to any dealing request made by a restricted person and of any clearance given o Restricted person who is given clearance to deal must deal as soon as possible and in any event within two business days of clearance being received o Restricted person must notify the company in writing of the dealing within four business days (DTR 3.1.2R) o The issuer must then notify an RIS of the dealing by no later than the end of the business day following the receipt of the information by the company (DTR

3.1.4R).

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