REALTECH AG has been listed on the Frankfurt Stock Exchange since April 26, 1999. That means that trading in REALTECH's shares is subject to the regulations of the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – Federal Financial Services Supervisory Authority). One of BaFin's key tasks is the supervision of securities trading. This aims to ensure that the German markets for securities and derivatives function in line with the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act).
According to the WpHG, exploiting insider information or the unauthorized communication of insider information is prohibited, as this would otherwise undermine market players' trust in fair securities trading with equal opportunities for all.
REALTECH's employees are subject to the ban on insider trading, and information in this regard is provided in REALTECH's memo of the same name. At the same time, the text of this memo forms part of the employment contract for all of REALTECH's employees worldwide.
Legislators recently modified the WpHG. During this process, the categories of "primary insider" and "secondary insider" were deleted. We have modified the memo accordingly to take these circumstances into account. In particular, please note that as a result we have deleted the Primary Insider Recommendations. This was worded as follows:
"Primary insiders should:
Buy or sell REALTECH shares exclusively within a period of ten stock-market days following publication of the (provisional) consolidated quarterly or annual figures of REALTECH AG (”exercise window")."
At the same time, please note that, in case of any doubt, of course all REALTECH employees can proceed in line with this recommendation when buying and selling REALTECH shares.
The following section includes the wording of the updated REALTECH memo, which applies with immediate (October 2007) effect:
Ban on insider trading
Who is an insider?
In addition to members of the executive bodies (Executive Board, Supervisory Board of REALTECH AG, managing directors of affiliated companies) REALTECH employees can also be insiders if they are aware of insider information.
What is insider information?
Insider information is specific information concerning circumstances that are not public knowledge, that relate to one or more issuers of insider securities (REALTECH AG) or to the insider securities themselves (REALTECH shares), and that are suitable to significantly influence the market price of the insider securities (REALTECH shares) in the event of the information becoming known to the public. This includes:
- Planned major acquisition
- Divestiture of key divisions
- Integration, spin-offs, transformations, splits, and other essential
structural measures
- Control and/or profit transfer agreements
- Purchase or sale of essential investments
- Take-over offers, offers of cash payment, and purchase offers
- Corporate actions
- Change to the dividend rate
- Imminent stoppages of payments or excessive debt
- Significant extraordinary expenses (e.g. following major damages or the
detection of criminal practices) or significant extraordinary income
- Retreat from or inception of new core fields of business
- Conclusion, modification, or termination of particularly important
contract relationships (including cooperation agreements)
- Significant inventions, issuing of significant patents, and granting of
important licenses
- Decisive product liability and pollution cases
- Lawsuits and antitrust proceedings of particular significance
- Personnel changes in key company positions
Extract from the Wertpapierhandelsgesetz (WpHG - German Securities Trading Act)
Section 12 Insider securities
Insider securities are securities which are
1. admitted to official trading on a German stock exchange or included in the Regulated Market (geregelter Markt) or OTC trading (Freiverkehr), or
2. are admitted to trading on an organized market in another Member State of the European Union or in another of the Contracting States to the Agreement on the European Economic Area or
3. for which the price directly or indirectly depends on securities within the meaning of number 1 or number 2.
Admission to trading on an organized market or inclusion in the regulated market or OTC trading is given if application has been filed for admission or inclusion, or if this has been publicly announced.
Section 13 Insider information
1) Insider information is specific information concerning circumstances that are not public knowledge, that relate to one or more issuers of insider securities or to the insider securities themselves, and that are suitable to significantly influence the market price of the insider securities in the event of the information becoming known to the public. Such suitability would exist if judicious investors were to take the information into account in their investment decisions. Circumstances within the meaning of sentence 1 also include situations that can be assumed to be sufficiently likely to occur in the future. In particular, insider information includes information about circumstances that are not public knowledge within the meaning of sentence 1 and that meet one of the following criteria:
1. They relate to orders placed by others to buy or sell financial instruments.
2. They relate to derivatives in accordance with Section 2, paragraph 2, point 4 for which market participants would expect to obtain the information on the relevant markets in accordance with permissible practice.
(2) An assessment that is made entirely on the basis of circumstances that are public knowledge is not insider information, even if it could have a significant influence on the price of insider securities.
Section 14 Ban on insider dealings
(1) It is forbidden to:
Use insider information to buy or sell insider securities for one’s own account, for the account of a third party or on behalf of another person
1. Inform another person of insider information or make insider information accessible to another person without authorization
2. Recommend to another person, based on insider information, to buy or sell insider securities or induce them to do so in some other way
(2) Dealings in treasury shares as part of buy-back programs and measures to stabilize the price of financial instruments do not constitute a violation of the ban in paragraph 1, provided that they are carried out in accordance with the provisions of Commission Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions for buy-back programs and stabilization of financial instruments (OJ EU No. L 336, page 33). For financial instruments that are traded on the over-the-counter market or on the regulated market, the provisions in Regulation (EC) No. 2273/2003 apply accordingly.
Section 38 Penal provisions
(1) A prison sentence of up to five years or a fine will be imposed on anyone who:
1. Buys or sells an insider security contrary to Section 14, paragraph 1, point 1
2.
a. as a member of the Executive or Supervisory Board, or as a personally liable shareholder of either the issuer or a company associated with the issuer,
b. based on their investment in the capital of the issuer or a company associated with the issuer,
c. based on their occupation, activities or defined task, or
d. in order to prepare for or commit a criminal offense
Has access to insider information and intentionally performs one of the actions listed in Section 39, paragraph 2, point 3 or 4 using this insider information
(2) A sentence or fine will also be imposed on anyone who deliberately performs one of the actions listed in Section 39, paragraph 1, point 1 or 2 or paragraph 2, point 11 and as a result influences the domestic market price of a financial instrument or the price of a financial instrument on an organized market either in another member state of the European Union or in another contracting state of the Treaty on the European Economic Area.
(3) In the cases specified in paragraph 1, an attempted action will also be punishable.
(4) If, in the cases specified in paragraph 1, point 1, the offender acts with hazardous negligence, the penalty will be either a prison sentence of up to one year or a fine.
(5) A ban specified in paragraph 1, point 1 or 2 in connection with Section 39, paragraph 2, point 3 or 4 or in paragraph 2 in connection with Section 39, paragraph 1, point 1 or 2 or paragraph 2, point 11 is equal to a corresponding foreign ban.