Purpose of the policy
In the spirit of ensuring conformance with the principles of good corporate governance and compliance with the Companies Act and JSE Listing Requirements (“JSE LR”), the Board of Sabcap have agreed to formulate and adopt this Security Dealings Policy to regulate and control their conduct and behaviour in this regard.
This document is intended to provide guidance to Sabcap directors in respect of their dealings in Sabcap securities and the procedure to follow with regards to disclosure thereof to Sabcap.
Who must disclose dealings?
Dealings in Sabcap securities by or on behalf of;
-a director, prescribed officer and company secretary of Sabcap (for Sabcap securities held beneficially, whether directly or indirectly);
-a director and company secretary of a major subsidiary of Sabcap; and
-any associate of a Sabcap director or company secretary.
When is clearance to deal required?
-All directors must receive clearance prior to dealing in Sabcap securities, at all times.
-A director must seek clearance to deal from the Chairman (or any other appropriate director(s) designated for this purpose). In his/her own case, the Chairman, or other designated director, must advise the Board in advance, or advise another designated director, and receive clearance from the Board or designated director, as appropriate.
-A director cannot be given clearance to deal during a prohibited period, which includes a closed period and any other period where non-public, price sensitive information exists. The director may or may not be aware of such price sensitive information.
-A written record is maintained by the Sabcap company secretary of any request for clearance, or clearance granted (or declined) as regards dealings by directors.
When must Sabcap be advised of the dealings?
-Before any dealing in Sabcap securities takes place, when seeking clearance; and
-As soon as the dealing in Sabcap securities has taken place, provide the required information regarding the dealing without delay, and in any event, within 72 hours after dealing.
When are dealings in securities by directors prohibited?
-A director may not deal during a prohibited period, which means:
- • any period when there exists any matter, which constitutes unpublished price sensitive information in relation to the issuer's securities (whether or not the director has knowledge of such matter; or
- • a closed period.
-A ‘closed period’ includes a period:
- • from the end of a reporting period (interim or financial year-end) up to the publication of results in respect of that reporting period;or
- • when Sabcap is trading under a cautionary announcement.
-The JSE (on consultation and application) may waive compliance with this requirement (ie, the prohibition to deal) when the director has no discretion regarding a transaction.
Required information to be included in the dealings announcement:
The dealings announcement shall contain the following information:
-the name of the director concerned;
-the name of the company of which he/she is a director;
-the date on which the transaction was effected;
-the price, number, total value and class of securities concerned. Where there are various prices, the high, the low and the volume weighted average price;
-in the case of options or any other similar right or obligation, the option strike price, strike dates and periods of exercise and/or vesting;
-the nature of the transaction;
-the nature and the extent of the director's beneficial interest in the transaction (ie, direct or indirect interest). In the case of dealings by associates, the name of the associate and the relationship with the director must be disclosed;
-confirmation as to whether the trades were done on-market or off-market;
-in respect of a transaction pursuant to paragraph 3.64(h) of the JSE LR, the announcement must disclose the nature, term and amount of the financial obligation as well the number of securities offered as security, guarantee, collateral or otherwise; and
-whether clearance has been granted (this requirement does not apply in the case of dealings by associates).
In respect of directors' dealings, Sabcap is obligated to:
-advise each of its directors of their obligations to disclose all information required to comply with the JSE LR regarding directors' dealings;
-inform directors of the procedure for obtaining clearance and circumstances under which it will not be granted;
-inform directors of their obligations regarding disclosure and timing of such disclosure;
-publish the required SENS announcement within 24 hours of receipt of such information from the director concerned.
In respect of directors' dealings, directors are obligated to:
-obtain clearance to deal from the company;
-once they have dealt, provide the required information to Sabcap regarding their dealings without delay and, in any event, within 72 hours after dealing; and
-once an associate of a director has dealt in Sabcap shares, the affected director must disclose the required information regarding the dealing without delay and, in any event, within 72 hours after dealing.
In respect of their associates and investment managers, directors are obligated to:
-advise their associates and investment manager(s) dealing on their behalf, whether on a discretionary basis or not, that they are directors of Sabcap;
-advise their investment manager that they may only deal in Sabcap securities where the director has expressly given consent (in writing) and must be notified immediately when a trade has taken place, no later than 72 hours after dealing; and
-advise their associates that they must be notified immediately when a trade in Sabcap securities has taken place, no later than 72 hours after dealing, in order to comply with the JSE LR.
Dealings in securities of Sabcap’s associate and investee companies
-The same restrictions on dealings shall apply to dealings in Sabcap’s associate and investee companies where Sabcap is represented on the board or one of Sabcap’s directors is a member of the board.
-It will not apply to non-executive directors of Sabcap who are not on the boards of any investee companies in respect of those investee companies if only publicly available information is made available by the executive directors of Sabcap to the Board of Sabcap.
-For clarity, if Sabcap’s executive directors represent Sabcap on the board of a company and have authority to disclose information to the Sabcap board, all Sabcap directors and their associates are restricted.
Financial Markets Act
Directors are advised that the JSE LR do not override the provisions of the Financial Markets Act (FMA) and should not be construed as additional defences or exclusions from having to comply with the FMA.
Directors must, at all times, be aware of the insider trading provisions contained in the FMA.
What is insider information?
Specific or precise information on Sabcap, that has not been made public and which:
-is obtained as an insider; and
-if it were made public would have a material effect on the price of Sabcap securities.
Who is an insider of Sabcap?
A person who has inside information on Sabcap through being a director or employee of Sabcap, or has access to such information by virtue of his/her position.
What constitutes an insider trading offence in terms of the FMA?
-When a director of Sabcap has knowledge of Sabcap inside information (an insider), and deals directly or indirectly, in Sabcap securities, (s)he commits an offence.
-When a director of Sabcap has knowledge of Sabcap inside information and discloses such inside information to another person, (s)he commits an offence.
-When a director of Sabcap has knowledge of Sabcap inside information and encourages (or discourages) another person to deal (from dealing) in Sabcap securities, to which the inside information relates or which are likely to be affected by, (s)he commits an offence.
Prohibited trading practices
-No person may participate in any practice which may create;
•a false or deceptive trading activity in connection with;
•an artificial market price, for Sabcap securities
Penalties for offences
- A person who is found guilty of market abuse in a criminal court is liable to a fine not exceeding R50 million or to imprisonment not exceeding 10 years, or both. The FSB may institute a civil claim against a person who traded in Sabcap securities while in possession of inside information. If it is proven that a person profited or avoided a loss through unlawful dealing, the profit or loss avoided (whether realized or not) may be recovered. In addition, a penalty of up to R1 million and four times such profit make or loss avoided may be imposed.
- This document only highlights key aspects of the provisions under the FMA in respect of trading in Sabcap securities and directors are encouraged to familiarize themselves with the full provisions of the FMA.
-At the time of their appointment, all directors and the company secretary shall sign an acknowledgement that they have been made aware of the contents of this Policy and that they agree to abide by the same.
-In the event that any director or the company secretary shall act in contravention of the terms and spirit of this Policy, such act shall immediately be brought to the attention of the Board.
-In the event of a contravention, the Board must consider the nature and scope of the said contravention, and, after affording the defaulting party an opportunity to explain his/ her actions, determine the appropriate action to be taken.
-The sanctions imposed by the Board may include a suspension or even dismissal of the offending party, provided such actions are consistent with the Policy of the Company, Companies Act and any other applicable legislation.
-director's immediate family (spouse and minor children under 18); and/or
-the trustees of any trust of which the director or any of the director's immediate family (spouse or minor children) is a beneficiary or discretionary subject or any trust in which the director, or immediate family, has the ability to:
•control 35% or more of votes;
•appoint 35% or more of trustees; or
•appoint or change 35% or more of the beneficiaries; and/or
-any company in whose equity securities the director or their associates (taken together) are directly or indirectly beneficially interested or have a conditional, contingent or future entitlement to become beneficially interested in, and are able:
•to exercise or control the exercise of 35% or more of the votes;
•to appoint or remove directors holding 35% or more of voting rights; or
•exercise or control the exercise of 35% or more votes at the board meeting; and/or
-any close corporation in which the individual director and/or their family members are interested in more than 35% of the members' interest; and/or
-any associate of a company (including a trust) as defined under associate in relation to a company (ie, an associate of a company is an associate of the director if the company is an associate of that director).
- Examples of associates in relation to a company:
•its subsidiary or holding company
•a company with common directors in the majority
•any company where the associate company controls more than 35% of the votes, board meeting votes or appoint 35% of the directors
•any trust there the associate company controls more than 35% of the trustee votes, appoint 35% or change 35% of the beneficiaries
- Directors are aggregated at listed company level when considering directors, ie, where more than one director of Sabcap is directly or indirectly beneficially interested in the equity securities of a company, then the interests of those directors and their associates will be aggregated when determining whether a company is an associate of any director of Sabcap.
-any interest in a security, means the de facto right or entitlement to directly receive the income payable in respect of that security and/or to exercise or cause to be exercised any or all of the voting, conversion, redemption or other rights attaching to that security;
-any other interest, means the obtaining of any benefit or advantage, whether in money, in kind or otherwise, as a result of the holding of that interest; and/or
-any interest to dispose or direct the disposition of the company's securities, or any part of a distribution in respect of the securities.
In relation to a security, the person or entity with any one or more of the following:
-the de facto right or entitlement to directly or indirectly receive any dividend or interest payable in respect of that security;
-the de facto right to exercise or cause to be exercised in the ordinary course of events, any or all of the voting, conversion, redemption or other rights attached to such security; or
-dispose or direct the disposition of the company's securities, or any part of a distribution in respect of the securities.
An example of direct beneficial is where a director holds securities in Sabcap therefore deriving a direct benefit from such holding.
An example of indirect beneficial is where a director holds Sabcap securities through a trust or through an associate therefore deriving an indirect benefit from such holding.
A subsidiary that represents 25% or more of total assets or revenue of the consolidated group based on the latest published financial results.
-any sale, purchase or subscription (including in terms of a rights offer, capitalization award or scrip dividend) of securities relating to Sabcap;
-any agreement to sell, purchase or subscribe for securities relating to Sabcap (irrespective of whether shares or cash flows);
-any donations of securities relating to Sabcap;
-any dealing in warrants, single stock futures, contracts for difference or any other derivatives issued in respect of Sabcap's securities;
-the acceptance, acquisition, disposal, or exercise of any option (including but not limited to options in terms of a share incentive/option scheme) to acquire or dispose of securities;
-any purchase or sale of nil or fully paid letters;
-the acceptance, acquisition or disposal of any right or obligation, present or future, conditional or unconditional, to acquire or dispose of securities;
-using securities in Sabcap as security, guarantee, collateral or otherwise granting a charge, lien or other encumbrance over the securities of Sabcap. A transaction will be deemed to be present at each of the following trigger events–
•at the time of agreement of such arrangement;
•at the time when a right or discretion afforded to a lender is being exercised; and
•at the time an existing arrangement is being amended or terminated;or
-any other transaction that will provide direct or indirect exposure to the share price of Sabcap; It must be noted that this does not include cash settled share appreciation rights granted to directors by the issuer in the ordinary course of business.
Includes stocks, shares, preference shares, debentures, specialist securities, notes, units of stock issued in place of shares, and options on stocks or shares or on such debentures, notes or units, and rights thereto, options on indices of information as issued by a stock exchange on prices of any of the aforementioned instruments, but excluding:
-shares in a private company; or
-stocks or shares in a public company that cannot be acquired or transferred without the consent or approval of the directors or any representatives of the company, other than such consent or approval required by, under or by virtue of any law, or options on or rights to such stocks or shares; or
-bankers acceptances, negotiable certificates of deposit issued by a bank, or by a mutual bank, or any other similar short-term instruments.