Company Securities (Insider Dealing) Act 1985

JurisdictionUK Non-devolved
Citation1985 c. 8


Company Securities (InsiderDealing) Act 1985

1985 CHAPTER 8

An Act to consolidate the enactments relating to insider dealing in company securities.

[11th March 1985]

B e it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Regulation of insider dealing

Regulation of insider dealing

S-1 Prohibition on stock exchange deals by insiders, etc.

1 Prohibition on stock exchange deals by insiders, etc.

(1) Subject to section 3, 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( c ) he knows is unpublished price sensitive information in relation to those securities.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 section 3, 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( c ) he knows is unpublished price sensitive information in relation to those securities of that other company, and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) The next subsection 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 section 3, 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 section 3, 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 section 3, where an individual has knowingly obtained (directly or indirectly), from an individual to whom subsection (5) applies, information that the offer referred to in that subsection 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 section 3, an individual who is for the time being prohibited by any provision of this section 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 section 3, 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.

S-2 Abuse of information obtained in official capacity.

2 Abuse of information obtained in official capacity.

(1) This section applies to any information which—

( a ) is held by a Crown servant or former Crown servant by virtue of his position or former position as a Crown servant, or is knowingly obtained by an individual (directly or indirectly) from a Crown servant or former Crown 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 Crown servant or former position of the former Crown 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 section applies to a Crown servant or former Crown servant holding information to which this section applies and to any individual who knowingly obtained any such information (directly or indirectly) from a Crown servant or former Crown servant who that individual knows or has reasonable cause to believe held the information by virtue of his position or former position as a Crown servant.

(3) Subject to section 3, an individual to whom this section 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 subsection (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.

S-3 Actions not prohibited by ss. 1, 2.

3 Actions not prohibited by ss. 1, 2.

(1) Sections 1 and 2 do not prohibit an individual by reason of his having any 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;

( b ) entering into a transaction in the course of the exercise in good faith of his functions as liquidator, receiver or trustee in bankruptcy; or

( c ) doing any particular thing if the information—

(i) was obtained by him in the course of a business of a jobber 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.

‘Jobber’ means an individual, partnership or company dealing in securities on a recognised stock exchange and recognised by the Council of The Stock Exchange as carrying on the business of a jobber.

(2) An individual is not, by reason only of his having information relating to any particular transaction, prohibited—

( a ) by section 1(2), (4)( b ), (5) or (6) from dealing on a recognised stock exchange in any securities, or

( b ) by section 1(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 paragraph ( a ), or

( c ) by section 2 from doing anything,

if he does that thing in order to facilitate the completion or carrying out of the transaction.

S-4 Off-market deals in advertised securities.

4 Off-market deals in advertised securities.

Subject to section 6, sections 1 to 3 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...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT