In brief - Listed companies now need a trading policy
From 1 January 2011 listed companies are required under ASX
Listing Rule 12.9 to adopt a trading policy. Trading policies
are designed to reduce the potential for conflicts of interest and
During a blackout period, directors and senior staff are
prevented from trading in their company's stock. They are
permitted to trade this stock at any time outside the designated
blackout period. The time outside the blackout period is known as a
According to the ASX, the typical blackout period is the period
between the close of the company's financial books and the
release to the market of the company's half yearly or annual
accounts. However, many organisations also have blackout periods
for other occasions.
What you need to consider
There are various questions you need to ask yourself when
formulating a trading policy for your corporation. These
Who within the company will the policy apply to?
When will there be blackout periods?
Which classes of security will the blackout periods apply
Will any exceptions be granted? If so, to whom?
Is the trading policy in breach of the Corporations
Act or ASX Listing Rules?
Communicate the policy
The implementation of a trading policy was until very
recently a voluntary process. However, as it is now compulsory, it
is important that all listed companies create and implement
such a policy and ensure that it is effectively communicated to all
directors and senior staff.
As insider trading attracts severe penalties, including
imprisonment, it is imperative that this new requirement is not
treated as a mere formality.
Swaab Attorneys was the highest ranking law firm and the
13th best place to work in Australia in the 2010 Business Review
Weekly Best Places to Work Awards. The firm was a finalist in the
2010 BRW Client Choice Awards for client service and was named the
winner in the 2009 Australasian Legal Business Employer of Choice
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).