"The Securities" confirmed the existence of a special record that details the transactions

Managements of joint-stock companies are obligated to follow “insiders’ trades ”

As of last Wednesday, the financial markets started banning insider trading.

Photography: Ahmed Arditi

The Securities and Commodities Authority confirmed that public shareholding companies are obligated to follow up their insiders' trades in the shares issued by them, whether members of the board of directors or employees, stressing the existence of a special register for each company that explains these transactions in detail.

Written rules

The Authority stated in an awareness leaflet, of which Emirates Today obtained a copy, that the procedures of the Supervisory Committee and the follow-up of insiders' trades, in light of the "new governance guide", stipulate that the company's board of directors must issue written rules regarding the transactions of the company's board members and employees in securities. Issued by the company, parent company, subsidiaries, or sister companies, and assigning one of the company's departments, an internal committee, or a special committee, or whomever it deems appropriate for the company to prepare a special and integrated record for all informed persons, including persons who can Considering them as informed persons on a temporary basis, and who are entitled or have access to the internal information of the company before its publication, and the record also includes the prior and subsequent disclosures of the insiders, in addition to managing, following up and supervising the transactions of informed persons and their properties, keeping their record, and notifying the Authority and the Market of an updated list of names Insiders at the beginning of each fiscal year, and any adjustments that occur to it during the fiscal year.

According to the Securities and Commodities Authority, the assignment also includes handing over a copy of the insiders record to the authority upon its request, and adhering to any other requirements set by the authority, noting that the matter is left to the company regarding the composition of the committee and the number of its members.

Trade ban

Last Wednesday, the financial markets began the process of banning insiders from trading in listed companies, which will continue until the companies announce their financial results for the third quarter of 2020.

The system stipulates that insiders are prohibited from circulating 15 days before the end of the quarterly, semi-annual or annual financial period, until the financial results are disclosed.

It is also customary to prevent the financial markets from trading insiders 10 working days before the announcement of any material information that would affect the share price up or down, unless the information resulted from emergency events that the company does not have any prior information about.

Ban decision

Last Wednesday, the Abu Dhabi and Dubai Financial Market issued a circular requiring all listed companies, in addition to operating brokerage firms, to implement the ban on insider trading until their financial data is disclosed.

The ban on insider trading under the applicable system includes: the chairman, members of the board of directors of the company whose securities are listed on the market, its general manager, or any of the employees familiar with the company’s material data, personally or for his account by others, or in any other capacity for the account of others in the securities. The financial statements of the company itself, or the parent, subsidiary, sister or affiliate company of that company.

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