Security Trading Policy
Eftel Limited’s (ASX: EFT) Security Trading Policy was released in accordance with ASX Listing Rule 12.9 and the guidance note published by the ASX on 1 January 2011.
Eftel Limited Security Trading Policy
The objectives of this policy are to:
- minimise the risk of Directors, Key Management Personnel and employees contravening the laws against insider trading; and
- ensure Eftel Limited is able to meet its reporting obligations under the Australian Securities Exchange Listing Rules; and
- increase transparency with respect to the trading in the securities of Eftel by Directors, Key Management Personnel and employees.
This policy is binding on all Directors, Key Management Personnel and employees of Eftel Limited and its various subsidiaries (“Eftel”).
Key Management Personnel is defined as persons having authority and responsibility for planning, directing and controlling the activities of Eftel, directly or indirectly.
- Corporations Act – Insider Trading
All Directors, Key Management Personnel and employees are advised that all trading in securities of Eftel is subject to the statutory requirements of the Corporations Act 2001.
The Corporations Act 2001 prohibits a person who possesses inside information, and knows, or ought reasonably to know, that the information is inside information, from:
- applying for, acquiring or disposing of, financial products; or
- entering into an agreement to apply for, acquire or dispose of financial products; or
- procuring another person to apply for, acquire or dispose of financial products; or
- procuring another person to enter into an agreement to apply for, acquire or dispose of financial products; or
- directly or indirectly communicating that information to another person who might trade in financial products.
Financial Products includes shares and any other tradeable security of Eftel.
Inside Information is defined as information that is not generally available, and if the information were generally available, a reasonable person would believe that information is likely to influence persons who commonly acquire financial products in deciding whether or not to acquire or dispose of the financial products.
Eftel Directors, Key Management Personnel and employees will from time to time be in a situation where they are in possession of inside information. The risk of contravention of insider trading laws by a Director or employee of Eftel in relation to information concerning public companies has been substantially reduced by the introduction of the continuous disclosure regime under Listing Rule 3.1 of the ASX. Under that regime, public companies are required to disclose all price sensitive information immediately to the ASX, except in limited circumstances.
There are a number of limitations and qualifications to the above. They include:
- the ASX Listing Rules and the Corporations Act 2001 permit companies to not disclose certain information, for example confidential negotiations
- the time period between the particular event or circumstance and the time it takes for the company to comply with the continuous disclosure obligations with regard to that particular event or circumstance.
In these situations there is still the risk of contravention of the insider trading laws. There is also the potential for the perception of a contravention even though there has not been an actual contravention. Such a circumstance would reflect badly on Eftel and the individual Director or employee concerned.
The penalties for breaching the insider trading provisions of the Corporations Act 2001 can include fines and imprisonment.
- Policy for Trading in Securities
Eftel allows and encourages Directors, Key Management Personnel and employees to own and trade securities in the company.
Trading in securities means buying or selling shares, options or other securities in Eftel or any products issued or created over or in respect of Eftel’s securities, or entering into transactions in relation to shares, options or other securities in Eftel or any products issued or created over or in respect of Eftel’s securities. It also includes procuring another person to do any of these things.
Directors, Key Management Personnel and employees of Eftel may trade in securities of Eftel in the following circumstances:
- They have satisfied themselves that they are not in possession of any Inside Information (as defined above), and
- The transaction will not be undertaken in a Closed Period.
The Closed Periods include:
- 1 July through to the date of the release to the ASX of the Preliminary Final Report, and
- 1 January through to the date of the release to the ASX of the Half Yearly Report.
The following exceptional circumstances are excluded from the application of this Security Trading Policy:
- Transfers of securities between associated entities of the applicable person such that the beneficial ownership does not change
- Acquisitions of shares as a result of the exercise of options or conversion of securities giving a right of conversion to shares
- Undertakings to accept, or acceptance of, a takeover offer
- Trading under an offer made to all or most of the share holders of Eftel. Examples include share purchase plans, dividend reinvestment plans and rights issues
- Disposal of securities as a result of a secured lender exercising their rights
- Severe Financial Hardship. In this circumstance the applicable person is required to obtain the approval in writing from the Chairman of Directors prior to undertaking any transaction. Upon receipt of written approval the trading in Eftel securities must be completed within 14 days. After 14 days the written approval will lapse.
Directors and Key Management Personnel must not acquire securities of Eftel with the intention of trading them on a short-term basis (a period less than 12 months).
ASX Listing Rules require Eftel to notify the ASX within 5 days of any trading in securities of Eftel by Directors. In order for Eftel to comply with these obligations all Directors are required to notify the Company Secretary, or in his absence, the Chairman of Directors, within 4 days of any trading in securities of Eftel.
Key Management Personnel are required to notify the Company Secretary, or in his absence, the Chairman of Directors, within 4 days of any trading in securities of Eftel. The Company Secretary is required to notify the Chairman of Directors within 4 days of any trading in securities of Eftel.
Directors and Key Management Personnel must not communicate price sensitive information to a person who may trade in the securities of Eftel.
- Breach of Trading Policy
Any breach of Eftel’s Securities Trading Policy is subject to disciplinary action, including possible termination of employment.