Control over insider information

Aleksandr Ulyanov, Deputy Head of Internal Audit and Risk Management Department

The requirements of the legislation on insider information appear due to the placement of financial instruments on the Russian exchanges (MICEX). According to the Internal Control Policy to observe the legislation the Company has 3 stages of compliance control in terms of insider information: preventive, current and subsequent. To establish preventive compliance control by the BoD we have the Regulations on the Insider Information (approved by the BoD, protocol #95 dd. 28.12.2011), taking into account requirements of Federal Law #224-FZ dd. 27.07.2010 on measures taken against illegal usage of insider information and on alterations introduced into statutes of the Russian Federation. Under the Regulations we set the rules for preparation of the insider list, operations with insider financial instruments (IDGC of Urals and SACs) as well as conclusion of agreements on insider information confidentiality and additional agreements to labor contracts with insiders. To improve preventive control the BoD approved the Corporate Ethics Code regulating corporate responsibility and behavior of insiders.

Current compliance control implies that the Company keeps records of the insider list, notifications on the inclusion or exclusion from it and insider transactions with the Company’s securities, control over observation of rules for operations with insider financial instruments (IDGC of Urals and its SACs) based on information on operations by insiders as well as control over observation of legislation on insider information during pre-contractual activities. Subsequent compliance control implies that we analyze prices of our financial instruments on organized markets, influence of news on price fluctuations, operations with our securities declared in notifications forwarded by insiders to the Company and information on operations performed by our shareholders from our registrar.