Securities: Insider Information

 

On 17 January 2012 the Federal Service for Financial Markets (“FSFM”) issued Order No. 12-2/pz-n which supplements and specifies the list of insider information.

The Order was registered with the Ministry of Justice on 13 March 2012.

The Order amends FSFM Oder No. 11-18/pz-n of 12 May 2011 which follows the Federal Law on Combating Unlawful Use of Insider Information and Market Manipulation (please see our legal update of 25 – 31 July 2011).

According to the Order, the following information relating to issuers of securities is now included in the list of insider information: (i) the fact that the board of directors of an open joint stock company (OJSC) has made no decision relating to recommendations concerning a voluntary or mandatory bid, obtained from a person, which include 1) evaluation of the price of the acquired securities and of possible change in their market value after the acquisition and 2) valuation of the plans of the person in relation to the OJSC (including its employees); (ii) entering into the strategic partnership agreement or other agreement not provided for under the list of insider information; and (iii) concluding an interested party transaction which is to be approved by an authorized governing body of the issuer (whether this information will be considered insider information will depend on the value of the transaction pro rated to the issuers’ asset value).

According to the Order, the information contained in the audit report prepared in respect of the annual or interim financial statements of the issuer is also considered insider information.
Information which the issuer sends to the state bodies or stock exchanges of a foreign country when the issuer places its securities in such country will be considered insider information only if such information may have a material effect on the price of the securities of the issuer.
The Order also specifies a definition of the meaning of insiders performing operations on the currency exchange.

The Order will enter into force ten days after the date of its official publication.

For further information please contact Igor Ostapets or Alexandra Schukina in the Moscow office of White & Case, tel + 7 495 787 3000 .

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