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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


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