Trading when your company is listed on the JSE

[Pho3nix]

Hi all,

What are the possible issues that might come out of such a venture?
I know what they mention in the movies but don't actually have an idea on the real world repercussions of such and why it's kinda frowned upon.

 

[Drifter]

You can trade on the JSE in anything except your companies own shares. That could be seen as insider trading. (Illegal).

 

[AchmatK]

You can trade on the JSE in anything except your companies own shares. That could be seen as insider trading. (Illegal).

Wrong. You can trade in your company shares as long as everything is disclosed properly. Just check the SENS announcements listing dealings in securities by directors.

 

[AchmatK]

There are some limitations in when you can trade. Not sure of all the regulations.

 

[Drifter]

Oh, ok. Thanks.

 

[KingRat1]

You may not trade in your shares if you have information, that is not in the public domain, that would or could affect the price of your shares. (insider knowledge)

 

[bchip]

General rule of thumb is there is no problem in buying/selling of the company you work at.

If you are a director you need to disclose when you do this to the JSE.
If you work in (as 1 example) in the finance team in the 3 weeks before doing annual financial statements
then more than likely this is a closed period (in which you cannot buy or sell) because doing so
might be construed as acting on insider information.

 

[Shi]

You may not trade in your shares if you have information, that is not in the public domain, that would or could affect the price of your shares. (insider knowledge)

For trading in in shares of your company, there are closed periods to adhere to as well.

 

[Sinbad]

Pretty sure any company listed on the JSE should have a compliance department that deals with policies about personal trading...?

 

[MrR]

There are some limitations in when you can trade. Not sure of all the regulations.

Yep; you get closed periods, which is between interim and FYE (whenever you prepare and release financial statements for a period).

 

[MrR]

Pretty sure any company listed on the JSE should have a compliance department that deals with policies about personal trading...?

Yep. They'll need to comply with the Companies Act and any (and all) laws and regulations that they need to comply with. So there should be a compliance/legal department (or at the very least outsourced entity) . There should be a company secretary (sometimes the FD or MD will act as secretary) that can give you more information about trading and closed trading periods.

 

[Shi]

General rule of thumb is there is no problem in buying/selling of the company you work at.
If you work in (as 1 example) in the finance team in the 3 weeks before doing annual financial statements
.

I think most listed companies' closed period is longer than this. I've seen ones where it is 2 to 3 months - often from the time the financial period ends to the time the financials are published. This means that often employees of these companies cannot trade their shares for 4 to 6 months in the year. Tragic!

 

[SauRoNZA]

Normally companies announce a "no trading" period close to major announcement to prevent any insider trading happening.

However the odds of you even buying/selling 1% of your company's shares is probably pretty slim and therefore you could hardly call that insider trading as the profits being made are almost inconsequential.

 

[SauRoNZA]

Normally companies announce a "no trading" period close to major announcement to prevent any insider trading happening.

However the odds of you even buying/selling 1% of your company's shares is probably pretty slim and therefore you could hardly call that insider trading as the profits being made are almost inconsequential.

 

[Pho3nix]

Pretty sure any company listed on the JSE should have a compliance department that deals with policies about personal trading...?

They aren't replying to my mails

 

[HavocXphere]

They aren't replying to my mails

Send them a mail asking how insider trading profit should be disclosed on your tax return. That should get you their undivided attention.

Best is not to trade in your own company at all. However, for directors one approach is to schedule the trades a long time in advance. That solves the majority of the problems.

However the odds of you even buying/selling 1% of your company's shares is probably pretty slim and therefore you could hardly call that insider trading as the profits being made are almost inconsequential.

:wtf::wtf::wtf: Not even close. Its considered fraud regardless of relative scale.

I do believe there is an exception for smaller indirect holdings though. i.e. If you buy a unit trust that happens to have a tiny bit of shares in your company. Even that is heavily restricted though.

 

[Pho3nix]

Send them a mail asking how insider trading profit should be disclosed on your tax return. That should get you their undivided attention.

Best is not to trade in your own company at all. However, for directors one approach is to schedule the trades a long time in advance. That solves the majority of the problems.

So the issue is they apparently don't allow employees to have Personal Trading account's with other entities. Recently joined and only mentioned my FNB ShareSaver account.
Was going through my mail and I still have a G247 account with some money in it. Can't move over to my employers system without the compliance officer clearing me on the FICA registration so I can withdraw my funds. Compliance officer and her manager aren't answering my calls

 

[Hamster]

Not sure if it is relevant, but I work on a trading platform. The only limitation is between certain dates you aren't allowed to trade their shares because of potential insider trading/unfair knowledge of the company.
@Pho3nix, mind if I ask who your employer is?

 

[Pho3nix]

Not sure if it is relevant, but I work on a trading platform. The only limitation is between certain dates you aren't allowed to trade their shares because of potential insider trading/unfair knowledge of the company.
@Pho3nix, mind if I ask who your employer is?

PM'd

 

[HavocXphere]

The only limitation is between certain dates you aren't allowed to trade their shares because of potential insider trading/unfair knowledge of the company.

The closed periods are the bare minimum...i.e. during that period it would be so sketchy that its pretty much guaranteed to be insider trading unless you've got temporary amnesia. That doesn't mean you can't go down for insider trading outside of the closed period. Plus just an accusation is usually enough to hurt a career. Its got a bit of a guilty until proven innocent vibe about it in that sense, which is why directors go out of their way to avoid it even if it costs them money (see scheduled trades above).