Directors Dealings Disclosure Rules

All UK Directors and all US "Insiders" of publicly listed companies are required to disclose their transactions in their company shares. The UK regulation is contained in the 1977 Model Code of the London Stock Exchange (LSE) and the 1985 Companies Act. In the UK, mandatory reporting by insiders is limited to the top management (i.e. executive board members) and to the non-executive directors only. In contrast, US insiders legally comprise a much larger group: large shareholders, (non-executive) directors and managers (officers).

When can Insiders Trade?

The directors of companies traded on the LSE cannot trade during the two months preceding a preliminary, final or interim earnings announcement and one month prior to a quarterly earnings announcement. Outside the trading ban periods, directors still require clearance to trade from the board's chairman. In contrast, there are no such restrictions in the US system which favours frequent disclosure to remove possible insider advantages rather than trading bans during price-sensitive times.

When do insiders have to report their trades?

Under UK Financial Conduct Authority (FCA) reporting requirements (DTR 3.1.2 through to DTR 3.1.8), persons discharging managerial responsibilities and their connected persons, must notify the issuer in writing of the occurrence of all transactions conducted on their own account in the shares of the issuer, or derivatives or any other financial instruments relating to those shares within four business days of the day on which the transaction occurred.

In the US, insiders previously only had to report their holdings within the first ten days of the month following the month of the trade, but this was changed by section 403 of the Sarbanes-Oxley Act which said that directors, officers and principal stockholders (i.e. owners of more than 10% of equity) are obliged to report their transactions to the SEC no later than on the second trading day following the transaction date.