Key Points:
There are a number of things that companies can do to limit
the potential fallout from trading policy breaches.
The release of ASX's latest figures on directors' trades
during a blackout period is a good opportunity for companies and
directors to do some housekeeping.
The blackout period is typically between the end of the
financial year or half-year and the publication of the
company's annual or half-yearly results. Some companies also
have self-imposed additional blackout periods. There is no law
against directors' trading during that time, but it causes
serious problems for both the company and the involved
director.
Directors' trading policies
ASX's corporate governance rules effectively require
companies to publish a directors' trading policy. Typical
policies will either prohibit trading during the blackout period or
allow trading in limited circumstances with the written approval of
the chairman or the Board.
