Skip to Content
Whole SectionText only Print Print Manager Link

7. Restrictions on Insider's Trading

7.1 Restriction on Trading (CLOSE PERIOD)

The permanent insiders shall schedule their trading of securities issued by the company, so that their trading will not undermine confidence in the securities markets.
7.1.1. Close Period:

According to the Disclosure Standards requirements, the company shall define the period when the permanent insiders shall not trade in its securities prior to the publication of annual and interim reports and financial statements of the company, as per Article 41.5 of the Disclosure Standards.

However, to ensure the implementation of the close period, and the equal treatment among all listed companies and insiders, and due to the different dates of issuing annual financial statements, the implementation of Article 5 of Resolution 3/1990 will be continued as practiced now.

Therefore, the permanent insiders are prohibited from trading from the beginning of the last month of the company's financial year (i.e. December for those companies following the Georgian calendar), until the financial statements are published.
7.1.2. Following Day or 24 Hours:

According to Article 58 of the Disclosure Standards, following the dissemination of the information, insiders should refrain from trading until the public has had an opportunity to evaluate it thoroughly.

In this case, the Agency recommends that when dissemination of the abovementioned information is made, the insider may only trade after either of the following two periods, whichever is less:
•  The following day's trading session: Insiders should wait until the commencement of the following day's trading session (i.e. until 10.00 a.m. the next day), or
•  Twenty-four hours: The insider should wait until twenty-four hours has elapsed since the general publication of the release in a national medium, starting from the official working hours of the BSE (i.e. 7.30 a.m.).
7.1.3. The Company may, where necessary, also define other restrictions on trading, or extend the abovementioned refraining from trading periods.
7.2. Scope of the restriction on trading

The restrictions on trading shall be applied to the listed company's insiders as well as to persons under their guardianship and control, and corporations in which they exercise control or influence the decision-making of the company.

An insider shall also be responsible for compliance with the restriction on trading when the management of the securities of the insider has been assigned to another party.

The restriction on trading shall not be applied in cases where:
1. buying securities by subscribing or obtaining them directly from the company or its group;
2. receiving securities in consideration of redemption, merger, demerger, or as compensation in accordance with a public tender offer, or in another comparable manner;
3. receiving shares as dividends (bonus shares), or another form of payout from retained earnings;
4. receiving securities as compensation for work or other performance or service;
5. receiving securities as inheritance under a will, as a present or as a result of partition of an estate, or by means of similar acquisition.
It should be noted that the prohibition against the abuse of inside information shall also be valid when deviating from trading restrictions.
Back to top