In the course of your work duties, you can be exposed to inside information which is not yet public and that could impact the price of ST’s stock or the stock of another company.
Inside information shall be kept strictly confidential. Employees in possession of such information are prohibited from trading or attempting to trade securities while in possession of non-public material information.
Employees are prohibited from recommending or inducing another person to trade in securities on the basis of non-public material information (tipping).
ST aims at preventing the unlawful use of non-public information and opposes the misuse of inside information in trading. The penalties for engaging in such behavior can be severe, including fines and imprisonment.
What does it mean?
Insider trading involves buying or selling securities based on material, precise non-public information about a company, either ST or any other business partner. It includes recommending or inducing another person to trade in securities based on non-public material information, a practice called tipping.
Non-public material information includes information:
- Of a “precise nature”;
- Not been made public, i.e confidential;
- Which would, if public, likely influence investment decisions.
How we do the right thing?
Our Do’s
- We keep non-public material information confidential and are careful about what we say or share.
- We comply with applicable insider trading laws and regulations that protect the integrity of the financial markets.
- When in doubt, we seek advice and consult with the office of the Legal Counsel or the office of the Chief Ethics & Compliance Officer.
Our Don’ts
- We never use inside information in any transaction.
- Tipping is prohibited: we never recommend or induce another person to trade in securities on the basis of non-public information.
- We never use confidential information about other companies to initiate a transaction, even if ST stock is not concerned.
Avoiding insider trading
in practice
Because real life is rarely as clear-cut as theory, here are the answers to a few questions you might have.
A big order just came in. I’ve heard “company XYZ is about to launch a game changer. I bet they are going to make a ton of money when these hit the market next quarter.” I watched the stock market and was already thinking about buying some stock in company XYZ anyhow. Since I won’t be trading in ST stock, is it acceptable?
No. Since the information is not yet public and a typical shareholder could be influenced in their decision to sell or not, this would be considered insider trading.
As part of our jobs, we may encounter confidential information about other companies or business partners. We must never use this intel as a basis to initiate any transaction, either directly or indirectly.
I am part of negotiations on an important business transaction, which the market will likely welcome. During the weekend, I shared the information with my cousin, who I know might be trading in the marketplace. Is this considered insider trading?
Yes, this would qualify as insider trading. Joint ventures like mergers or acquisitions may be considered non-public material information. Such information is sensitive because it could significantly affect the company’s stock price once disclosed.
Sharing this information with your relative, even if there is no direct personal advantage to you, is strictly forbidden. You would be enabling them to trade based on confidential knowledge that is not available to the public, which is a violation of insider trading laws and ST policies.