5.3.1 Definition of Insider Dealing

The following amount to Insider Dealing:

• (a) the use, by a Person who possesses Inside information, of that information by acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, Investments to which that information relates; or
• (b) the use of Inside Information by cancelling or amending an order concerning Investments to which the information relates where the order was placed before the Person concerned possessed the Inside Information; or
• (c) the use of recommendations or inducements to engage in Insider Dealing MAR 5.3.2 (Recommending or Inducing Insider Dealing), where the Person using the recommendation or inducement knows or ought to know that it is based on Inside Information.

5.3.2. Recommending or Inducing Insider Dealing

A Person (‘A’) recommends another Person (‘B’) to engage in Insider Dealing or induces B to engage in Insider Dealing, where A possesses Inside Information and:

• (a) recommends, on the basis of that information, that B acquires or disposes of Investments to which that information relates, or induces B to make such an acquisition or disposal; or
• (b) recommends, on the basis of that information, that B cancels or amends an order concerning Investments to which that information relates, or induces B to make such a cancellation or amendment.

5.3.3. Persons to whom MAR 5.3.2 and MAR 5.3.1 apply

MAR 5.3.1 (Definition of Insider Dealing) and MAR 5.3.2 (Recommending or inducing Insider Dealing) apply:

• (a) to any Person who possesses Inside Information as a result of:
• (i) being a member of the administrative, management or supervisory bodies of the Issuer; or
• (ii) having a holding in the capital of the Issuer; or
• (iii) having access to the information through the exercise of an employment, profession or duties; or
• (iv) being involved in criminal activities;
• (b) to any Person who possesses Inside Information other than under the circumstances specified in (a) where that Person knows or ought to know that the information is Inside Information; or
• (c) where the Person in (a) or (b) is a legal Person, in addition to that legal Person, to the natural Persons who participate in the decision to carry out the acquisition, disposal, cancellation or amendment of an order for the account of the legal Person concerned.

5.3.4. Behaviour that does not constitute Insider Dealing

A Person (‘A’) who is or who has been in possession of Inside Information will not be deemed to have used that information for acquisition or disposition of Investments merely because A is or was in possession of Inside Information:

• (a) Where A is a legal Person and A:
• (i) has established, implemented and maintained adequate and effective internal arrangements and procedures that effectively ensure that neither the natural Person who made the decision on its behalf to acquire or dispose of Investments to which the information relates, nor another natural Person who may have had an influence on that decision, was in possession of the Inside Information; and
• (ii) has not encouraged, made a recommendation to, induced or otherwise influenced the natural Person who, on behalf of the legal Person, acquired or disposed of Investments to which the information relates.
• (b) Where A:
• (i) for the Investments to which the information relates, is a Market Maker or a Person authorised to act as a counterparty, and the acquisition or disposal of Investments to which that information relates is made legitimately in the normal course of the exercise of its function as a market maker or as a counterparty for those Investments; or
• (ii) is authorised to execute orders on behalf of third parties and the acquisition or disposal of Investments to which the order relates, is made to carry out such an order legitimately in the normal course of the exercise of that Person’s employment, profession or duties;
• (c) Where A conducts a transaction to acquire or dispose of Investments and that transaction is carried out in the discharge of an obligation that has become due in good faith and not to circumvent the prohibition against Insider Dealing and:
• (i) that obligation results from an order placed or an agreement concluded before the Person concerned possessed Inside Information; or
• (ii) that transaction is carried out to satisfy a legal or regulatory obligation that arose, before the Person concerned possessed Inside Information.

5.3.5. Behaviour that does not constitute Insider Dealing – public takeover

It will not be deemed from the mere fact that a Person is in possession of Inside information that that Person has used that information and has thus engaged in Insider Dealing:

• (a) where such Person has obtained that Inside Information in the conduct of a public takeover or merger with a company and uses that Inside information solely for the purpose of proceeding with that merger or public takeover; and
• (b) provided that at the point of approval of the merger or acceptance of the offer by the shareholders of that company, any Inside Information has been made public or has otherwise ceased to constitute Inside Information.

5.3.6. Behaviour that does not constitute Insider Dealing – use of own knowledge

The mere fact that a Person uses its own knowledge that it has decided to acquire or dispose of Investments in the acquisition or disposal of those Investments will not of itself constitute use of Inside Information.

Guidance:

Behaviour that does not constitute Insider Dealing Notwithstanding the provisions in MAR 5.3.4 to MAR 5.3.6, an infringement of the prohibition of Insider Dealing may still be deemed to have occurred if the AFSA establishes that there was an illegitimate reason for the orders to trade, transactions or behaviours concerned.