Corporate Governance Framework
Annex B: Insider dealing
1. Insider dealing is a serious criminal offence under the Criminal Justice Act 1993 (opens in new tab). If you come into possession of ‘inside information’ you must be scrupulous in your use of that information. In particular:
- you must not deal on a regulated market or through a professional intermediary in securities whose price would be significantly affected if the inside information were made public
- you must not encourage anyone else to do so (whether for your benefit or theirs)
- you must not disclose such information to others (even in confidence to other Commission officials) unless it is necessary for the proper performance of your work.
2. ‘Inside information’ means information which:
- relates to particular securities or to a particular issuer or issuers of securities
- is specific or precise
- has not been made public
- if it were made public would be likely to have a significant effect on the price of any securities.
Conflict of interest
3. A decision by the Commission would be open to legal challenge, and could be set aside, if the private financial interests of any person substantively involved in the decision making process were such as to give rise to a reasonable presumption of bias. (Persons ‘substantively involved’ include not only the decision taker but also others who contribute to the decision, for example through research or advice). Any person who feels adversely affected by such a decision and who alleges bias by an official involved in the decision making process may:
- take legal action against the Commission in respect of the decision
- seek damages against a person with a conflict of interest against whom bias is alleged.
4. In law, the possibility of conflict of interest does not necessarily stop with consideration of financial interests held by you. Bias could be alleged in respect of the interests of anyone with whom you may have a family, domestic or other relationship and over whose decisions on investment matters you may reasonably be thought to exert an influence and where knowledge of such matters can reasonably be imputed to you. In that event a court would examine the facts of the matter to decide whether bias should be presumed.
Relevant financial interests
5. For the purpose of these instructions, you should consider both your own financial interests and those of others to whom you give investment advice. You should consider financial interests such as shares and other forms of investment such as options and other similar products. Nevertheless, you should always bear in mind that a financial interest even though small could, depending on circumstances, give rise to a legal presumption of conflict of interest and therefore of bias.
6. You must then closely observe the following basic rules:
- if you are in possession of any inside information, you must not purchase or sell an interest in securities whose price would be significantly affected if the inside information were made public, or encourage others to do so (whether for your benefit or theirs) or pass on the information to third parties unless disclosure is necessary for the proper performance of your work
- if you, or those to whom you give investment advice, have a financial interest of which the value could reasonably be thought to be affected by an impending decision by the Commission, you must not participate in any way in the decision making process. You must immediately declare your position to your manager. This should be done even if you have already declared your interest under supplementary rules that apply to you (see the following).
7. It is not possible to set out in these procedures all the requirements which, in order to avoid conflict of interest, apply to different types of work in the Commission. Therefore, Directors may issue from time to time, as a supplement to these rules, local instructions to their employees relevant to the needs of the work. Depending on the circumstances of the work these supplementary rules might include, for example:
- notification to the Development Manager of all or specified categories of financial interest; although it should not be necessary to require notification of the size of such interests
- a ban of a defined group of employees engaging in dealings in financial interests within particular periods of time
- a ban on a defined group of employees holding certain kinds of financial interests
- a requirement for defined groups of employees to obtain prior permission to deal in certain financial interests.
8. If you are in any doubt as to your proper course of action in any of these areas, you must consult your Development Manager who will consider whether or not to refer the matter to the Commission’s legal advisers. However, it is your responsibility to ensure that you act within the law and within the Commission’s rules. Even if not a criminal offence under the insider dealing legislation, a breach of these requirements or of any supplementary instructions issued by a Director will make you liable to disciplinary proceedings. Any enquiries about this information should be addressed to the Head of Human Resources.Previous section
Annex A: Summary of reporting requirements
Last updated: 10 July 2023
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