Insiders and trading

Insiders should schedule the trading in company's own shares to such time periods when the markets have as exact information as possible on factors affecting the value of the company's security. It is advisable that insiders take the shares as long term investments and refrain from active trading in them.

In order to avoid suspicions of abusing inside information the insider can acquire own company's securities eg through separate acquisition programmes. In such a programme the insider commits himself in advance to acquire a certain amount of own company's shares within a set period of time.

Another possibility is that the company requires the insider to acquire authorisation from the person responsible for insider issues within the company for each securities trade. This approach enables the insider to ensure that, at the time of trading, there are no on-going arrangement that may be taken as inside information.

The company can also define the time periods when the insider cannot trade in the company's shares. Such time periods refer eg to periods before an interim report or the company's financial statement is published. For example, the stock exchange rules for insiders prohibits insiders from trading own company's shares at least 14 days prior to the publication of an interim report and financial statement of the company. However, the insider must always ensure that he does not possess any project-specific inside information.



2 February 2010

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