7.5 Adopting and updating procedures on the processing of information (Market Abuse Procedure)
On 12 December 2013, the Snam Board of Directors approved the “Procedure on Market Abuse”35(the “Market Abuse Procedure”), which combines and coordinates into a single document the market abuse rules and principles to which the Company and its related parties must adhere in order to:
- ensure appropriate processing of privileged information36 relating to the Company and its direct and indirect Controlled Companies, in Italy and abroad, by those in possession of such information;
- regulate operations on the Company’s financial instruments by persons who hold a senior position within the Company’s ownership structure and/or corporate organisational structure (internal dealing); and
- define the operating methods and scope of application of the ban imposed on the Company on performing transactions on listed financial instruments it has issued in predetermined periods.
The Market Abuse Procedure is divided into four sections:
Section I – Management of privileged information and register of persons with access to privileged information37
This section sets forth the rules for the management and processing of privileged information, as well as the procedures to be followed for communicating said information both within and outside of the Company, in order to prevent privileged information from being processed at the wrong time and/or in an incomplete manner, or to prevent said processing from resulting in information asymmetry.
This section of the Market Abuse Procedure also governs the creation, maintenance and updating of the register of persons with access to privileged information, in accordance with Article 115-bis of the TUF and with Articles 152-bis et seq. of the Issuer Regulations.
In accordance with Article 152-bis, paragraph 4 of the Issuer Regulations, the Controlled Companies have mandated the Company to create, manage and maintain the register in relation to key personnel at the Controlled Companies who have access to privileged information.
Section II – Rules governing internal dealing38
This section governs operations on the Company’s financial instruments by persons who hold a senior position within the Company’s ownership structure and/or corporate organisational structure. Specifically, it includes: (i) the criteria for identifying “Significant Persons” and “Significant Transactions” to which the regulations should be applied; (ii) the disclosure obligations of “Significant Persons” and of the Company to Consob and to the public with regard to “Significant Transactions”; and (iii) the rules governing the ban on carrying out “Significant Transactions” during “black-out periods39”).
Section III – Black-out periods
This section defines the scope of application of the ban on the Company performing transactions on listed financial instruments it has issued during black-out periods and the related operating methods.
Section IV – Penalty framework
This section provides a summary framework of the penalties for market abuse set forth in the TUF and in Legislative Decree 231/2001.
The Market Abuse Procedure has been transposed by the Boards of Directors of the Controlled Companies, without prejudice to foreign controlled companies applying said Procedure in accordance with their local laws.
35 Previously, the market abuse provisions were set forth in three different corporate procedures.
36 A definition of privileged information and a description of market disclosure obligations can be found in Articles 114 and 181 of the TUF and in Articles 66 et seq. of the Issuer Regulations.
37 Article 115-bis of the TUF requires listed issuers, entities controlled by them and persons who act in their name or on their behalf to create and regularly update a register of persons with access to privileged information as a result of their professional activity or the duties they perform. The rules governing the creation and updating of the register can be found in Article 115-bis of the TUF and in the implementation provisions pursuant to Articles 152-bis et seq. of the Issuer Regulations.
38 The rules governing internal dealing – i.e. transparency on transactions involving shares in listed companies and associated financial instruments carried out by said companies’ corporate officers and by persons closely related to them – are contained in Article 114, paragraph 7 of the TUF and in the relevant implementation provisions pursuant to Articles 152-sexies to 152-octies of the Issuer Regulations.
39 Pursuant to the Market Abuse Procedure, “Significant Persons” (other than “Significant Shareholders”) and “Closely Related Persons” are banned from carrying out – whether directly or via an intermediary – “Significant Transactions” until the public is notified, and in the 15 (fifteen) days prior to the dates on which the Snam Board of Directors examines the mandatory interim reports, the proposed interim dividend, the preliminary financial statements and the proposed dividend for the full year to be put before the Shareholders’ Meeting, if not disclosed at the same time as the preliminary data (the so-called black-out period). The ban does not apply to the purchase of shares carried out via the exercise of options issued under stock option and stock grant plans, although the sale of these shares is forbidden during black-out periods. Definitions of “Significant Persons”, “Significant Shareholders” and “Closely Related Persons” can be found in subsection 220.127.116.11 of the Market Abuse Procedure; a definition of “Significant Transactions” can be found in subsection 18.104.22.168 of the Market Abuse Procedure.