More restrictions on directors and employees buying shares
by Anthony Manduca
The council of the Malta Stock Exchange has just approved changes to its rules on dealings by directors and employees in possession of price sensitive information in the listed securities of those companies in which they hold a directorship.
The council said that this was being done "in the context of the review being undertaking by the Exchange with regards to market practices and compliance with internationally accepted regulatory standards".
The current Malta Stock Exchange bye laws already prohibit a director from dealing directly or indirectly in such securities if any of the following criteria apply:
When in possession of unpublished price sensitive information.
Prior to an announcement involving any price sensitive information.
During any close period ahead of the preliminary announcement of a company's results and any dividend or distributions to be paid or passed.
Under the approved amendment to the bye laws, a director is now also prohibited from dealing in securities of the company in which he is a director on considerations of a short term nature. Observers, however, have questioned how to define "a short term nature".
Furthermore, prior to any dealing as may be permitted under the Exchange Bye Laws the approved amendments now also require a director or an employee to advise in writing the chairman or one or more other directors designated for this purpose of his/her intentions to deal. The listed company receiving any such advance notice of a director's intention to deal is required to maintain a written record and to confirm in writing to the director giving notice that a record of such notice has been retained.
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