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18 February 2011 New rules on blackout periods and trading windows for trading in listed company shares

By Alistair Jaque, Partner and Phillip Briffa, Solicitor


In brief - Listed companies now need a trading policy

From 1 January 2011 listed companies are required under ASX Listing Rule 12.9 to adopt a trading policy. Trading policies are designed to reduce the potential for conflicts of interest and insider trading.


Blackout periods 

During a blackout period, directors and senior staff are prevented from trading in their company's stock. They are permitted to trade this stock at any time outside the designated blackout period. The time outside the blackout period is known as a trading window.  

According to the ASX, the typical blackout period is the period between the close of the company's financial books and the release to the market of the company's half yearly or annual accounts. However, many organisations also have blackout periods for other occasions.  

What you need to consider  

There are various questions you need to ask yourself when formulating a trading policy for your corporation. These include:

  • Who within the company will the policy apply to?
  • When will there be blackout periods?
  • Which classes of security will the blackout periods apply to?
  • Will any exceptions be granted? If so, to whom?
  • Is the trading policy in breach of the Corporations Act or ASX Listing Rules?
Communicate the policy  

The implementation of a trading policy was until very recently a voluntary process. However, as it is now compulsory, it is important that all listed companies create and implement such a policy and ensure that it is effectively communicated to all directors and senior staff.  

As insider trading attracts severe penalties, including imprisonment, it is imperative that this new requirement is not treated as a mere formality.

For further information please contact:

Alistair Jaque, Partner  |  Phone: +61 2 9233 5544  |  Email: afj@swaab.com.au

If you would like to republish this article, it is generally approved, but prior to doing so please contact the Marketing team at marketing@swaab.com.au

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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