Rules for primary insiders - Borregaard ASA
1 Area of application
In addition to the obligations and responsibility that all employees and elected representatives of Borregaard have in accordance with the "Instructions for handling insider information at Borregaard", there are special obligations and responsibilities for primary insiders, as described in these rules.
A primary insider is a person who has one of the following positions or offices at, or assignments for, the Borregaard group:
1. member or observer of the board of Borregaard ASA and Borregaard AS
2. elected auditor of Borregaard ASA and Borregaard AS
3. executive management of Borregaard AS
4. other employees, elected representatives or consultants who are included on the primary insider list, ref. point 6.2
A related party of a primary insider means:
1. the spouse or a person with whom the primary insider cohabits in a relationship akin to marriage (civil partner)
2. the shareholder's under-age children, and under-age children of a person as mentioned in no. 1 with whom the shareholder cohabits
3. a party with whom the shareholder must be assumed to be acting in concert in the exercise of rights accruing to the owner of a financial instrument in Borregaard
4. a company (1)
a) in which the primary insider has controlling influence
b) in which persons mentioned in points 1, 2 and 3 above have controlling influence
Borregaard also has responsibilities and obligations as a primary insider when trading in shares etc. in Borregaard or companies in the same group. The same applies to trading in shares etc. in other listed companies where Borregaard is represented on the company's board due to ownership. Borregaard's notification requirement is described in point 6.3.
Financial instruments are for example shares listed on the stock exchange and bonds issued by Borregaard. For a detailed overview, see the Securities Trading Act section 2-2 (1).
3 Obligation to investigate
Before the primary insider may trade, he or she shall properly investigate whether there is precise information about the financial instruments that Borregaard has issued, about Borregaard or about other circumstances that, viewed objectively, is likely to noticeably affect the price of the shares or the financial instruments. Such information or circumstances that are not publicly accessible or generally known are insider information.
The information is precise if it indicates that something has happened or will probably happen and is sufficiently specific to be able to draw a conclusion about how the information would affect the price of the financial instruments. The information is also likely to noticeably affect the price if a sensible investor would probably use it as part of the basis for an investment decision.
If a primary insider has insider information, he or she cannot
− subscribe to, buy, sell or exchange shares or other financial instruments in Borregaard
− agree on, buy, sell or exchange option or forward contracts or corresponding rights connected to financial instruments (including financial derivatives) in Borregaard
Neither may he or she encourage others to or dissuade them from making such transactions.
Essentially, the obligation to investigate does not apply to Borregaard's trading in its own financial instruments, but if it is a primary insider who is responsible for the trading, or who initiates the trading, the primary insider must properly investigate.
The primary insider's related parties are not obliged to investigate if the related party trades in shares etc. However the primary insider is not permitted to give advice or become involved in the transaction in any other way.
4 Clearance obligation
Even if investigations do not reveal any insider information, the primary insider must clear the transaction with the CEO. The request for clearance shall be sent by letter, fax or e-mail (pdf file) on the Form for request of clearance of primary insiders.
The CEO can clear the transaction after first performing a proper investigation of whether there is insider information. If the CEO intends to trade, he must obtain clearance from the chair of the Board of Borregaard ASA. The chair of the Board must apply to the CEO for clearance.
Board members may ask the chair to clear transactions, but then the chair must first ask for clearance from the CEO. The chair of the Board shall receive confirmation from the CEO in writing before clearance is given to a Board member.
Clearance of primary insiders shall be on the Form for clearance of primary insiders.
The person making the clearance shall make a concrete assessment of whether there is insider information. The clearance shall state that this has been done. Clearance is normally valid for seven days, i.e. a binding agreement must have been entered into no later than during the course of the seventh day after clearance has been given. If a binding agreement is not entered into by this date, the primary insider must request fresh clearance. Even if clearance has been given, a primary insider cannot trade if he or she is in possession of insider information. The abuse of insider information is still prohibited even if clearance has been given.
Rejection of a request for clearance shall be on the Form for rejection of clearance of primary insiders.
The CEO (or chair of the Board) need not give any grounds for rejection.
5 Inheritance or gifts – transactions with related parties
The obligation for investigation and clearance does not apply to inheritance, gifts or unilateral dispositions of shares or financial instruments. It is a prerequisite that there is no payment in any form, either directly or indirectly.
Neither does the obligation for investigation and clearance apply to transactions between a primary insider and his or her wholly-owned company or companies. For transactions between a primary insider and other related parties, the obligation for investigation and clearance applies in full, ref. points 3 and 4 above.
6 Obligation to notify
6.1 Transactions by primary insiders or related parties
The following transactions by a primary insider or related party (ref. point 2) shall be notified to the Oslo Stock Exchange:
− purchase, sale, exchange or subscription to shares in companies in the Borregaard group
− taking a convertible loan (see section 11-1 of the Public Limited Companies Act) or buying, selling or exchanging subscription rights, options or corresponding rights (including financial derivatives) connected with shares as mentioned in the first point
The obligation to notify also applies to trading by a relative if at the time the trading occurred the primary insider has lived in the same household as the relative for at least a year.
The obligation to notify does not apply to trading in bonds issued by Borregaard.
It is the responsibility of the primary insider to ensure that the obligation to notify is fulfilled, but the Investor Relations (IR) department has the following routines:
1. Immediately a transaction has occurred, the primary insider shall report it both by telephone and by e-mail to the IR department at the stated address, with the following information:
− full name of the person with notification requirement
− background to the notification
− name of issuer
− description of the financial instrument
− type of transaction
− date and market of transaction
− price and volume of transaction
− holding of shares, options and other financial instruments after the transaction
2. The IR department shall thereafter immediately inform the Oslo Stock Exchange about the transaction. This is done in the form of a stock exchange release. If the agreement has been entered into after the stock exchange closed, the release must be sent before the exchange opens on its next day of business. The primary insider shall have a copy of the stock exchange release.
The obligation to notify does not apply where the primary insider inherits shares or other financial instruments or receives them as a gift.
6.2 Primary insider list and list of related parties
Primary insider list:
The IR department shall send the Oslo stock exchange an up-to-date list of primary insiders at Borregaard without undue delay. The CEO is responsible for informing the IR department of any changes that shall be notified to the Oslo stock Exchange, together with the primary insider's name, personal ID number (or D number), address, type of office or position at Borregaard and any other information about the position. The information should also include the holding of shares, options and other financial instruments for both primary insider and related parties.
List of related parties:
Primary insiders are responsible for ensuring that the Oslo stock exchange receives an up-to-date list of related parties who own financial instruments in Borregaard. The IR department handles the practical implementation in the same way as described in point 6.1. The following routines apply:
1. If the related party has not previously acquired financial instruments in Borregaard, the primary insider shall without undue delay report to the IR department by telephone in the same way as described above in point 6.1, and also send the Form for summary of related parties to the address given on the form.
2. The IR department shall then send an up-to-date list of the primary insider's related parties to the Oslo stock exchange with copies to the persons mentioned on the list.
6.3 Borregaard's obligation to notify
Borregaard shall immediately notify the Oslo stock exchange of the following transactions, as described above in point 6.1:
− Borregaard's trading in its own shares
− Borregaard's trading in other listed companies where Borregaard is represented on the company's board due to ownership
The IR department handles the notification in the form of a stock exchange release. If the transaction agreement has been entered into after the stock exchange closed, the release must be sent before the exchange opens on its next day of business.
7 Criminal liability
Breach of the provisions of the Securities Trading Act regarding the obligation to investigate and notify in respect of ones own share trading or that of related parties may result in a criminal penalty in the form of a fine or imprisonment. This applies to both intent and negligence. The same applies to a failure to submit up-to-date lists of primary insiders or of related parties' holdings of financial instruments. Abuse of insider information carries a mandatory prison sentence.
8 General caution
Primary insiders shall refrain from short-term transactions in Borregaard's shares and financial instruments connected with Borregaard's shares. They shall exercise general caution with regard to ownership periods and own-company investments shall be perceived as long-term.
(1) The definition of a related party is complicated, especially as regards companies. If you are in any doubt whether a party is related, see sections 2‑5, 3‑6, and 4‑2 of the Securities Trading Act, section 1-3 subsection 2 of the Public Limited Companies Act and section 1-2subsection 2 of the Private Limited Companies Act. Be aware that the notification requirement also applies to others than related parties; see point 6 above.