Company Securities (Insider Dealing) (Jersey) Law 1988

Jersey Law 1/1988 COMPANY SECURITIES (INSIDER DEALING) (JERSEY) LAW, 1988. ____________ 1 General interpretation provisions 2 Meaning of “connected with a company” 3 Meaning of “unpublished price sensitive information” 4 Meaning of “company” and “related company” 5 Meaning of “securities” etc 6 Meaning of “deal in securities” “off-market dealer” etc 7 Meaning of “take-over offer” 8 Prohibition on stock exchange deals by insiders etc 9 Abuse of information obtained in official capacity 10 Actions not prohibited by Articles 8 and 9 11 Off-market deals in advertised securities 12 Restriction on promoting off-market deals outside the Island and Great Britain 13 Trustees and personal representatives 14 Punishment of contravention 15 Investigations into insider dealing 16 Authority for search 17 Obstruction 18 Penalties for failure to co-operate with investigations 19 Exemptions 20 Citation and commencement A LAW to make provision regarding insider dealing in company securities and for connected purposes, sanctioned by Order of Her Majesty in Council of the 18th day of DECEMBER, 1987. ____________ (Registered on the 12th day of February, 1988.) ____________ STATES OF JERSEY. ____________ The 28th day of July, 1987. ____________ T HE STATES , subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law – ARTICLE 1 General interpretation provisions (1) In this Law – “Committee” means the Finance and Economics Committee; “the Companies Laws” means the Companies (Jersey) Laws, 1861 to 1968; 1 “Crown servant” means an individual who holds office under, or is employed by, the Crown; “enactment” includes an enactment of the United Kingdom; “recognised investment exchange” means a body declared by an order of the Committee for the time being in force to be a recognised investment exchange; “recognised stock exchange” means The Stock Exchange and any other investment exchange which is declared by an order of the Committee for the time being in force to be a recognised stock exchange; “share” has the same meaning in relation to companies not incorporated under the Companies Laws as it has in relation to companies so incorporated. (2) Subject to Articles 2 to 7 and this Article, expressions used in this Law and the Companies Laws have the same meaning in this Law as in those Laws. (3) References in this Law to any enactment include a reference to that enactment, as amended, and include a reference to that enactment as extended or applied by or under any other enactment, including any other provision of that enactment. (4) The Subordinate Legislation (Jersey) Law, 1960, 2 shall apply to Orders made under this Law. ARTICLE 2 Meaning of “connected with a company” For the purposes of this Law, an individual is connected with a company if, but only if – (a) he is a director of that company or a related company; or (b) (i) he occupies a position as an officer (other than a director) or employee of that company or a related company; or (ii) he occupies a position involving a professional or business relationship between himself (or his employer or a company of which he is a director) and the first company or a related company; which in either case may reasonably be expected to give him access to information which, in relation to securities of either company, is unpublished price sensitive information, and which it would be reasonable to expect a person in his position not to disclose except for the proper performance of his functions. ARTICLE 3 Meaning of “unpublished price sensitive information” Any reference in this Law to unpublished price sensitive information in relation to any securities of a company is a reference to information which – (a) relates to specific matters relating or of concern (directly or indirectly) to that company, that is to say, is not of a general nature relating or of concern to that company; and (b) is not generally known to those persons who are accustomed or would be likely to deal in those securities but would if it were generally known to them to be likely materially to affect the price of those securities. ARTICLE 4 Meaning of “company” and “related company” In this Law – “company” means any company, whether or not a company within the meaning of the Companies Laws; “related company”, in relation to a company, means any body corporate which is that company’s subsidiary or holding company, or a subsidiary of that company’s holding company. ARTICLE 5 Meaning of “securities” etc In this Law – “securities” means listed securities and, in the case of a company – (a) within the meaning of the Companies Laws, or a company having a place of business in the Island; or (b) within the meaning of the Companies Act 1985 of the United Kingdom, or a company registered under Chapter II of Part XXII of that Act or an unregistered company to which the provisions of that Act specified in Schedule 22 to that Act apply by virtue of section 718 of that Act; the following securities (whether or not listed), that is to say, any shares, any debentures, or any right to subscribe for, call for or make delivery of a share or debenture; “listed securities”, in relation to a company, means any securities of the company listed on a recognised stock exchange; “advertised securities”, in relation to a particular occurrence, means listed securities or securities in respect of which, not more than 6 months before that occurrence, information indicating the prices at which persons have dealt or were willing to deal in those securities has been published for the purpose of facilitating deals in those securities. ARTICLE 6 Meaning of “deal in securities” “off-market dealer” etc (1) For the purposes of this Law, a person deals in securities if (whether as principal or agent) he buys or sells or agrees to buy or sell any securities. (2) For the purposes of this Law a person who (whether as principal or agent) buys or sells or agrees to buy or sell investments referred to in paragraph (3) where the purpose or pretended purpose mentioned in that paragraph is to secure a profit or avoid a loss wholly or partly by reference to fluctuations in the value or price of securities shall be treated as if he were dealing in those securities. (3) The investments referred to in paragraph (2) are rights under a contract for differences or under any other contract the purpose or intended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of property of any description or in an index or other factor designated for that purpose in the contract. (4) “Off-market dealer” includes a person who is for the time being an authorised person within the meaning of the Financial Services Act 1986 of the United Kingdom. (5) An off-market dealer is taken – (a) to deal in advertised securities, if he deals in such securities or acts as an intermediary in connection with deals made by other persons in such securities (references to such a dealer’s officer, employee or agent dealing in such securities to be construed accordingly); and (b) to make a market in any securities, if in the course of his business as an off-market dealer he holds himself out both to prospective buyers and to prospective sellers of those securities (other than particular buyers or sellers) as willing to deal in them otherwise than on a recognised stock exchange. (6) For the purposes of Article 11, an individual is taken to deal through an off-market dealer if the latter is a party to the transaction, is an agent for either party to the transaction or is acting as an intermediary in connection with the transaction. ARTICLE 7 Meaning of “take-over offer” In this Law, “take-over offer for a company” means an offer made to all the holders (or all the holders other than the person making the offer and his nominees) of the shares in the company to acquire those shares or a specified proportion of them, or to all the holders (or all the holders other than the person making the offer and his nominees) of a particular class of those shares to acquire the shares of that class or a specified proportion of them. ARTICLE 8 Prohibition on stock exchange deals by insiders etc (1) Subject to Article 10, an individual who is, or at any time in the preceding 6 months has been, knowingly connected with a company shall not deal on a recognised stock exchange in securities of that company if he has information which – (a) he holds by virtue of being connected with the company; (b) it would be reasonable to expect a person so connected, and in the position by virtue of which he is so connected, not to disclose except for the proper performance of the functions attaching to that position; and (c) he knows is unpublished price sensitive information in relation to those securities. (2) Subject to Article 10, an individual who is, or at any time in the preceding 6 months has been, knowingly connected with a company shall not deal on a recognised stock exchange in securities of any other company if he has information which – (a) he holds by virtue of being connected with the first company; (b) it would be reasonable to expect a person so connected, and in the position by virtue of which he is so connected, not to disclose except for the proper performance of the functions attaching to that position; (c) he knows is unpublished price sensitive information in relation to those securities of that other company; and (d) relates to any transaction (actual or contemplated) involving both the first company and that other company, or involving one of them and securities of the other, or to the fact that any such transaction is no longer contemplated. (3) Paragraph (4) applies where – (a) an individual has information which he knowingly obtained (directly or indirectly) from another individual who – (i) is connected with a particular company, or was at any time in the 6 months preceding the obtaining of the information so connected; and (ii) the former individual knows or has reasonable cause to believe held the information by virtue of being so connected; and (b) the former individual knows or has reasonable cause to believe that, because of the latter’s connection and position, it would be reasonable to expect him not to disclose the information except for the proper performance of the functions attaching to that position. (4) Subject to Article 10, the former individual in that case – (a) shall not himself deal on a recognised stock exchange in securities of that company if he knows that the information is unpublished price sensitive information in relation to those securities; and (b) shall not himself deal on a recognised stock exchange in securities of any other company if he knows that the information is unpublished price sensitive information in relation to those securities and it relates to any transaction (actual or contemplated) involving the first company and the other company, or involving one of them and securities of the other, or to the fact that any such transaction is no longer contemplated. (5) Subject to Article 10, where an individual is contemplating, or has contemplated, making (whether with or without another person) a take-over offer for a company in a particular capacity, that individual shall not deal on a recognised stock exchange in securities of that company in another capacity if he knows that information that the offer is contemplated, or is no longer contemplated, is unpublished price sensitive information in relation to those securities. (6) Subject to Article 10, where an individual has knowingly obtained (directly or indirectly), from an individual to whom paragraph (5) applies, information that the offer referred to in that paragraph is being contemplated or is no longer contemplated, the former individual shall not himself deal on a recognised stock exchange in securities of that company if he knows that the information is unpublished price sensitive information in relation to those securities. (7) Subject to Article 10, an individual who is for the time being prohibited by any provision of this Article from dealing on a recognised stock exchange in any securities shall not counsel or procure any other person to deal in those securities, knowing or having reasonable cause to believe that that person would deal in them on a recognised stock exchange. (8) Subject to Article 10, an individual who is for the time being prohibited as above mentioned from dealing on a recognised stock exchange in any securities by reason of his having any information, shall not communicate that information to any other person if he knows or has reasonable cause to believe that that or some other person will make use of the information for the purpose of dealing, or of counselling or procuring any other person to deal, on a recognised stock exchange in those securities. ARTICLE 9 Abuse of information obtained in official capacity (1) This Article applies to any information which – (a) is held by a public servant or former public servant by virtue of his position or former position as a public servant, or is knowingly obtained by an individual (directly or indirectly) from a public servant or former public servant who he knows or has reasonable cause to believe held the information by virtue of any such position; (b) it would be reasonable to expect an individual in the position of the public servant or former position of the former public servant not to disclose except for the proper performance of the functions attaching to that position; and (c) the individual holding it knows is unpublished price sensitive information in relation to securities of a particular company (“relevant securities”). (2) This Article applies to a public servant or former public servant holding information to which this Article applies and to any individual who knowingly obtained any such information (directly or indirectly) from a public servant or former public servant who that individual knows or has reasonable cause to believe held the information by virtue of his position or former position as a public servant. (3) Subject to Article 10, an individual to whom this Article applies – (a) shall not deal on a recognised stock exchange in any relevant securities; (b) shall not counsel or procure any other person to deal in any such securities, knowing or having reasonable cause to believe that that other person would deal in them on a recognised stock exchange; and (c) shall not communicate to any other person the information held or (as the case may be) obtained by him as mentioned in paragraph (2) if he knows or has reasonable cause to believe that that or some other person will make use of the information for the purpose of dealing, or of counselling or procuring any other person to deal, on a recognised stock exchange in any such securities. (4) In this Article, “public servant” means – (a) a Crown servant; (b) a member, officer or employee of the States or any Committee of the States; (c) any person declared by an order under paragraph (5) to be a public servant for the purposes of this Article. (5) If it appears to the Committee that the members, officers or employees of or any person otherwise connected with any body appearing to it to exercise public functions may have access to unpublished price sensitive information relating to securities, it may by order declare that those persons are to be public servants for the purposes of this Article. ARTICLE 10 Actions not prohibited by Articles 8 and 9 (1) Articles 8 and 9 do not prohibit an individual by reason of his having information from – (a) doing any particular thing otherwise than with a view to the making of a profit or the avoidance of a loss (whether for himself or another person) by the use of that information; or (b) entering into a transaction in the course of the exercise in good faith of his functions as liquidator or as administrator or proper officer in matters of bankruptcy; or (c) doing any particular thing in relation to any particular securities if the information – (i) was obtained by him in the course of a business of a market maker in those securities in which he was engaged or employed; and (ii) was of a description which it would be reasonable to expect him to obtain in the ordinary course of that business; and he does that thing in good faith in the course of that business. In this Article – “market maker” means a person (whether an individual, partnership or company) who – (a) holds himself out at all normal times in compliance with the rules of a recognised stock exchange as willing to buy and sell securities at prices specified by him; and (b) is recognised as doing so by that recognised stock exchange. (2) An individual is not, by reason only of his having information relating to any particular transaction, prohibited – (a) by Article 8(2), (4)(b), (5) or (6) from dealing on a recognised stock exchange in any securities; or (b) by Article 8(7) or (8) from doing any other thing in relation to securities which he is prohibited from dealing in by any of the provisions mentioned in pargraph (a); or (c) by Article 9 from doing anything; if he does that thing in order to facilitate the completion or carrying out of the transaction. ARTICLE 11 Off-market deals in advertised securities (1) Articles 8 to 10 apply in relation to – (a) dealing otherwise than on a recognised stock exchange in the advertised securities of any company – (i) through an off-market dealer who is making a market in those securities, in the knowledge that he is an off-market dealer, that he is making a market in those securities and that the securities are advertised securities; or (ii) as an off-market dealer who is making a market in those securities or as an officer, employee or agent of such a dealer acting in the course of the dealer’s business; (b) counselling or procuring a person to deal in advertised securities in the knowledge or with reasonable cause to believe that he would deal in them as mentioned in sub-paragraph (a); (c) communicating any information in the knowledge or with reasonable cause to believe that it would be used for such dealing or for such counselling or procuring; as they apply in relation to dealing in securities on a recognised stock exchange and to counselling or procuring or communicating any information in connection with such dealing. (2) In its application by virtue of this Article the definition of “market maker” in Article 10(1) shall have effect as if the references to a recognised stock exchange were references to a recognised investment exchange (other than a recognised investment exchange which has its head office outside the British Islands). ARTICLE 12 Restriction on promoting off-market deals outside the Island and Great Britain (1) An individual who, by reason of his having information, is for the time being prohibited by any provision of Article 8 or 9 from dealing in any securities shall not – (a) counsel or procure any other person to deal in those securities in the knowledge or with reasonable cause to believe that that person would deal in the securities outside the Island and Great Britain on any stock exchange other than a recognised stock exchange; or (b) communicate that information to any other person in the knowledge or with reasonable cause to believe that that or some other person will make use of the information for the purpose of dealing, or of counselling or procuring any other person to deal, in the securities outside the Island and Great Britain on any stock exchange other than a recognised stock exchange. (2) Paragraph (1) does not prohibit an individual by reason of his having any information from acting as mentioned in any of paragraphs (a) to (d) of Article 10(1). (3) An individual is not, by reason only of having information relating to a particular transaction, prohibited by any provision of this Article from doing anything if he does that thing in order to facilitate the completion or carrying out of the transaction. ARTICLE 13 Trustees and personal representatives (1) Where a trustee or personal representative or, where a trustee or personal representative is a body corporate, an individual acting on behalf of that trustee or personal representative who, apart from paragraph (a) of Article 10(1) or, as the case may be, Article 12(2), would be prohibited by any of the Articles 8 to 12 from dealing, or counselling or procuring any other person to deal, in any securities deals in those securities or counsels or procures any person to deal in them, he is presumed to have acted with propriety if he acted on the advice of a person who – (a) appeared to him to be an appropriate person from whom to seek such advice; and (b) did not appear to him to be prohibited by Articles 8, 9, 11 or 12 from dealing in those securities. (2) “With propriety” means otherwise than with a view to the making of a profit or the avoidance of a loss (whether for himself or another person) by the use of the information in question. ARTICLE 14 Punishment of contravention (1) An individual who contravenes Articles 8, 9, 11 or 12 shall be liable on conviction for a term of imprisonment not exceeding 7 years or a fine, or both. (2) Proceedings for an offence under the said Articles shall not be instituted except by, or with the consent of, the Attorney General. (3) No transaction is void or voidable by reason only that it was entered into in contravention of the said Articles. ARTICLE 15 Investigations into insider dealing (1) If it appears to the Committee that there are circumstances suggesting – (a) that there may have been a contravention of Articles 8, 9, 11 or 12; or (b) that there may have been a contravention of the laws of another country or territory relating to insider dealing and that a person in the Island – (i) may have been concerned (directly or indirectly) in any such contravention; or (ii) may have information or documents which may be of assistance in the investigation of any such contravention; it may appoint one or more competent inspectors to carry out such investigations as are requisite to establish whether or not any such contravention has occurred and to report the results of their investigations to it. (2) The appointment under this Article of an inspector may limit the period during which he is to continue his investigation or confine it to particular matters. (3) If the inspectors consider that any person is or may be able to give information concerning any such contravention they may require that person – (a) to produce to them any documents in his possession or under his control relating to the company in relation to whose securities the contravention is suspected to have occurred or to its securities; (b) to attend before them; and (c) otherwise to give them all assistance in connexion with the investigation which he is reasonably able to give; and it shall be the duty of that person to comply with that requirement. (4) An inspector may examine on oath any person who he considers is or may be able to give information concerning any such contravention, and may administer an oath accordingly. (5) The inspectors shall make such interim reports to the Committee as they think fit or it may direct and on the conclusion of the investigation they shall make a final report to the Committee. (6) A statement made by a person in compliance with a requirement imposed by virtue of this Article may be used in evidence against him. (7) A person shall not under this Article be required to disclose any information or produce any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the Royal Court. (8) Nothing in this Article shall require a person carrying on the business of banking to disclose any information or produce any document relating to the affairs of a customer unless – (a) the customer is a person who the inspectors have reason to believe may be able to give information concerning a suspected contravention; and (b) the Committee is satisfied that the disclosure or production is necessary for the purposes of investigation. (9) Where a person claims a lien on a document its production under this Article shall be without prejudice to his lien. (10) In this Article, “document” includes information recorded in any form; and in relation to information recorded otherwise than in legible form references to its production include references to producing a copy of the information in legible form. ARTICLE 16 Authority for search (1) An inspector appointed under Article 15 may, for the purpose of an investigation under that Article apply to the Bailiff for a warrant under this Article in relation to specified premises. (2) On such an application the Bailiff may issue a warrant authorising the inspector and any other person named in the warrant to enter and search the premises if he is satisfied that the conditions in paragraph (3) are fulfilled. (3) The conditions referred to in paragraph (2) are – (a) that there are reasonable grounds for suspecting that there is on the premises material (whether or not it can be particularised) which is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the application is made; and (b) that the investigation for the purposes of which the application is made might be seriously prejudiced unless immediate entry can be secured to the premises. (4) Where a person has entered premises in the execution of a warrant issued under this Article, he may seize and retain any material other than items subject to legal professional privilege, which is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the warrant was issued. (5) In this Article, “premises” includes any place and, in particular, includes – (a) any vehicle, vessel, aircraft or hovercraft; (b) any offshore installations; and (c) any tent or movable structure. ARTICLE 17 Obstruction (1) Any person who wilfully obstructs any person acting in the execution of a warrant issued under Article 16 shall be guilty of an offence. (2) A person guilty of an offence under this Article shall be liable to imprisonment for a term not exceeding 7 years or a fine, or both. ARTICLE 18 Penalties for failure to co-operate with investigations (1) If any person – (a) refuses to comply with any request under Article 15(3); or (b) refuses to answer any question put to him by the inspectors appointed under that Article with respect to any matter relevant for establishing whether or not any suspected contravention has occurred; the inspectors may certify that fact in writing to the Royal Court and the court may inquire into the case. (2) If, after hearing any witness who may be produced against or on behalf of the alleged offender and any statement which may be offered in defence, the court is satisfied that he did without reasonable excuse refuse to comply with such a request or answer any such question, the court may punish him in like manner as if he had been guilty of contempt of the court. (3) A person shall not be treated for the purposes of paragraph (2) as having a reasonable excuse for refusing to comply `with a request or answer a question in a case where the contravention or suspected contravention being investigated relates to dealing by him on the instructions or for the account of another person, by reason that at the time of the refusal – (a) he did not know the identity of that other person; or (b) he was subject to the law of a country or territory outside the Island which prohibited him from disclosing information relating to the dealing without the consent of that other person, if he might have obtained that consent or obtained exemption from that law. ARTICLE 19 Exemptions The Committee may by order exempt – (a) any person or class of persons; (b) any transaction or class of transaction; (c) any security or class of securities; from all or any of the provisions of this Law. ARTICLE 20 Citation and commencement This Law may be cited as the Company Securities (Insider Dealing) (Jersey) Law, 1988. E.J.M. POTTER Greffier of the States. 1 Tomes I-III, page 232 and Volume 1968–1969, page 103.