Danuta Pajewska

Investments in securities by managers of public companies

A management board member, with access to confidential company information, is subject to a number of restrictions on buying or selling shares of the company, on his own or another’s account.

Under Polish law, investments in shares of public companies by members of their management boards are subject to legal restrictions, particularly with respect to the timing of the transactions.

These restrictions result primarily from the access such persons have to inside information of the company—precise information directly or indirectly concerning the company, its securities, or purchase or sale of its securities, which has not been publicly released and when released could affect the price of the securities or derivatives.

Members of the management board of a public company are prohibited from using inside information to buy or sell securities issued by the company, or taking other actions for themselves or a third party which cause or could cause disposal of the securities.

Management board members also may not disclose confidential information, make recommendations or encourage other persons to buy or sell securities affected by such information.

Members of the management board of a public company are prohibited from buying or selling shares in the company during the “closed period”—the period between the time they come into possession of confidential information and the time the information is publicly disclosed. In the case of financial reports, the prohibitions are generally in place:

  • For two months prior to publication of the annual report
  • For one month prior to publication of the midyear report
  • For two weeks prior to publication of the quarterly report.

Apart from refraining from trading during the closed period, members of the management board are also required to provide to the company and the Polish Financial Supervision Authority information about purchase or sale by themselves or persons closely related to them, for their own account, of shares or derivatives concerning shares in the company, as well as other financial instruments related to the shares which are listed on the market or for which listing is sought.

For this purpose closely related persons means spouses or persons in an intimate relationship, children or adoptees maintained by the board member, and relatives or in-laws sharing a household with the board member for at least a year.

This reporting obligation also exists if the purchase or sale of the shares in the company of which the person is a board member is made by an entity in which the board member or closely related person is a member of the management or supervisory authorities, has access to confidential information, or has a decisive influence over its operations.

Danuta Pajewska, Capital Markets and Financial Institutions practices, Wardyński & Partners