Dealing Code (former ‘Protocol’)

  • Introduction

    This Dealing Code constitutes an integral part of the Corporate Governance Charter of the company and has been adapted to applicable laws and regulations (in particular the Belgian Act of 2 August 2002 on supervision of the financial sector and financial services, the Belgian Royal Decree of 5 March 2006 on market abuse, and the Corporate Governance Code 2009).

    Policy statement

    This Dealing Code establishes the company's policy concerning the prevention of abusing Insider Information and market abuse. The Board of directors of the company has established the following rules to prevent insider information (as defined below) being used unlawfully by the 'Relevant Persons' (as defined below), or even that such an impression might be created. These prohibitions and monitoring their observance in the first place are intended to protect the market as such. The manner in which insider information is treated after all affects the essence of the market. If the Relevant Persons are given the opportunity to make a profit using insider information (or even if only the impression of such is created), investors will turn their backs on the market. Reduced interest can damage the liquidity of the listed shares and prevent the company from receiving optimum financing. Therefore, to ensure compliance with the legal provisions and maintain the reputation of the company, a number of preventative measures need to be taken in the form of a code of conduct. This code of conduct contains the minimum standards that must be followed, in addition to the applicable laws and regulations. However, compliance with the rules contained in this code of conduct does not discharge the person involved from his or her individual responsibility.

  • Basic principles for the abuse of insider information

    A person can receive access to insider information during the course of normal business operations. This person then has the important duty to treat this information confidentially and not to engage in the trading of the financial instruments of the company to which this insider information relates.

    II. 1 Definitions

     

    II. 1.1. Who is the Company?

    By Company is understood:

    The company limited by shares ('naamloze vennootschap', abbreviated into 'nv') Retail Estates, public regulated real estate company organised and existing under Belgian laws, with registered office at Industrielaan 6, 1740 Ternat, listed in the Brussels register of legal entities of the Crossroads Bank of Enterprises under number 0434 797 847.

     

    II. 1.2. Who is an Insider?

    Considered as 'Insider' for the purposes of these rules: each person who possesses insider information concerning Retail Estates nv, in general or with respect to a specific project or a specific event related to Retail Estates nv (irrespective of the way in which the insider information was obtained).

     

    II. 1.3. What is Insider Information?

    In order for this information to be considered as Insider Information, all of the following four cumulative conditions must be fulfilled:

    • The information must be accurate. Thus, vague and imprecise rumours can never be regarded as insider information. However, it is important to know that the information does not need to refer to events or situations that have already taken place or that will definitely take place. Information about events or situations that reasonably may be expected to occur can also be sufficiently clear if the information is specific enough to draw a conclusion concerning the possible impact of this event or situation on the price of financial instruments or derived financial instruments of the company.
    • The information must directly or indirectly concern the company or financial instruments of the company. This information can concern for example the results of the company, an impending merger, increases or decreases in dividends, issues of financial instruments, the signing of contracts, changes to management, strategic changes.
    • The information may not yet have been made public, in other words, not yet be generally distributed to the investors public. Information only loses its character as insider information when it is actually made public via mass media such as the written media or a website.
    • The information must be of such a nature that, if it were made public, the price of the financial instruments of the company (or derived financial instruments) could be influenced substantially. It is assumed that information could substantially influence the price of financial instruments or derived financial instruments if an investor trading reasonably would probably use this information as a partial basis for investment decisions. Whether or not the price actually would be influenced by later disclosure is irrelevant.

     

    II. 1.4. Which transactions are prohibited?

    The following transactions are prohibited for an Insider who knows or should know that the information in his or her possession constitutes Insider Information:

    • Prohibition from dealing: buying or selling, or attempting to buy or sell, or placing an order to buy or sell financial instruments of the company to which the insider information relates, for one's own account or for the account of a third party, both directly and indirectly. This prohibition applies to stock exchange transactions as well as off-exchange transactions.
    • Prohibition from communication: communicating Insider Information to a third party except in the context of the normal exercise of one's work, profession or position. Therefore, an insider having access to insider information has a duty of confidentiality. The insider is not liable for punishment only if he/she violates this duty of confidentiality in the context of the normal exercise of his or her work, profession or position.
    • Prohibition from making recommendations: recommending the purchase or sale (directly or via a third party) of financial instruments to a third party based on the insider information.
    • Prohibition from participating in any arrangement that aims to execute the transactions intended in the three previous points.
    • Prohibition from encouraging one or more other persons from engaging in acts that, if he or she were to execute them him/herself, would be prohibited in first three points, mentioned above.

     

    II. 1.5. Sanctions?

    Anyone who executes the transactions specified above in section II.1.4 while he or she knows or should have known that he/she was in the possession of insider information (regardless of whether he/she actually used this insider information), can be sanctioned by administrative law (in the form of substantial administrative law fines).

    In order for criminally sanctioned abuse of insider information to take place, a causal link must be shown between the possession of insider information and execution of the above mentioned prohibited transactions. In other words, if the possession of insider information is not the occasion for executing one of these transactions, the person in question is not subject to criminal prosecution for abusing insider information. The insider information must actually have been used in the dealing of the financial instruments (which implies that the relevant person knew or should have known that the information constituted insider information). The criminal offence of abusing insider information is sanctioned with a prison sentence and substantial criminal fines.

    In order for so-called 'Secondary Insiders' (i.e. insiders who are in possession of insider information that came directly or indirectly from persons who obtained the insider information based on their profession, work or position (so-called 'Primary Insiders')) to be criminally liable, there is an additional requirement that such Secondary Insiders knew or reasonably should have known that the information directly or indirectly came from a Primary Insider. The transactions specified in section II.1.4 are prohibited not only in Belgium but also abroad.

  • Code of conduct

    This Dealing Code constitutes a code of conduct for the directors, persons discharging managerial responsibilities, as well as certain executives and employees of the company, as well as all who have signed this Dealing Code (the 'Relevant Persons'), to prevent the abuse of insider information and market abuse. This code of conduct contains the minimum standards that must be followed, in addition to the applicable laws and regulations, and does not discharge the Relevant Person from his or her individual criminal and civil liability. The Board of directors of the company will prepare the list of positions within the company that meet the description 'Relevant Person'. 

     

    III. 1.1. Compliance with the law

    Due to his or her work, profession or position, a Relevant Person obtains information that he or she knows or reasonably should know constitutes insider information. Pursuant to applicable legal provisions, it is forbidden to deal, communicate, make recommendations, participate in agreements to this effect or encourage others to do so, as described in section II.1.4. This paragraph does not affect the reporting obligation as foreseen in section III. 1.2.

     

    III. 1.2. Compliance Officer

    The Board of directors has appointed a Compliance Officer, Mr. Paul Borghgraef (the 'Compliance Officer'). The compliance officer will, among other things, monitor compliance with this Dealing Code by the Relevant Persons. The compliance officer shall also ensure that each new Relevant Person of the company signs or has signed this Dealing Code. In this, the compliance officer shall take into account the list approved by the Board of directors of the company of the positions within the company that meet the description 'Relevant Person'.

     

    III. 1.3. Notification of stock exchange transactions (intentions and actual trade)

    Each Relevant Person who wishes to buy or sell financial instruments of the company, shall communicate this in writing to the Compliance Officer at least three stock exchange trading days before the transaction. In his or her notification, the relevant person must confirm that he or she did not possess any insider information. The compliance officer shall then inform the person involved whether a Closed Period or Prohibited Period is in force. On the occasion of the notification by the relevant person, the compliance officer may issue a negative recommendation concerning the planned transaction. The relevant person must consider the negative recommendation issued by the compliance officer as an explicit rejection of the transaction by the company. Save for exceptional circumstances, the compliance officer in any case shall issue a negative recommendation if the relevant person wishes to deal in financial instruments of the company during a Closed Period or Prohibited Period. However, the absence of a negative recommendation by the compliance officer does not prejudice the application of the legal provisions specified above. The possible silence of the compliance officer may not be taken as approval of the transaction by the compliance officer. If the transaction takes place, the relevant person must inform the compliance officer of this no later than the first day after the transaction, mentioning the quantity of traded financial instruments and the price at which they were traded. If the relevant person is a person discharging managerial responsibilities at the company, the relevant person must also inform the FSMA of the transaction within five working days after the transaction, in accordance with the applicable legal regulations. This obligation also applies to persons closely affiliated with persons discharging managerial responsibilities. If the total amount of the transactions in financial instruments of the company (i.e. the sum of all transactions in financial instruments of the company by a person with management responsibility and by all persons closely affiliated with such a person) is no more than 5,000 euro per calendar year, such notification may be postponed, but in any case must be made before 31 January of the following year. If the 5,000 euro threshold is exceeded, all transactions executed until this time must be reported to the FSMA within five working days after execution of the most recent transaction.

     

    III. 1.4. Prohibited Periods

    Relevant persons may not execute transactions concerning the financial instruments of the company during:

    • the two-month period prior to the announcement of the annual and semi-annual results of the company ending one hour after the announcement of the results via a press report on the company website, or if the results are announced within a period less than two months after the close of the relevant accounting period, the period from the close of the financial year through the date of announcement ending one hour after the announcement of the results via a press report on the company website ('Closed Period')
    • or during any other period that can be regarded as sensitive and communicated as such by the board of directors (“Prohibited Period”)

     

    III. 1.5. Preventative measures

    III. 1.5.1. Restrictions on speculative trade

    The company is of the opinion that speculative dealing in its financial instruments by relevant persons represents unlawful behaviour, or at least contributes to the appearance of such behaviour. For this reason it is hereby agreed that the relevant persons shall engage in none of the following transactions concerning the financial instruments of the company:

    • the successive acquisition and selling of financial instruments on the stock exchange in a period of less than three months
    • the acquisition or selling of sale and purchase options (‘puts’ and ‘calls’)
    • engaging in 'short selling' (i.e. any transaction in one or more financial instruments of the company that the seller does not own when he/she concludes the sales agreement, including such a transaction when the seller, at the moment that he or she concludes the sales agreement, has borrowed the financial instruments or concluded an agreement to borrow the financial instruments with a view toward delivering them upon settlement)

    III. 1.5.2. Guidelines for maintaining the confidential character of privileged information

    Below follow several guidelines that each relevantperson must follow with a view toward maintaining the confidential character of insider information:

    • refuse to provide any commentary on the company with respect to external investigations (e.g. analysts, estate agents, media, etc.) and immediately refer these people to the Chairman of the Board of directors or the CEO
    • use code names for sensitive projects
    • use passwords on the computer system to restrict access to the documents containing confidential information
    • restrict access to the areas where insider information can be retrieved or where confidential information is discussed
    • safely store away confidential information; do not discuss confidential information in public locations (e.g. lifts, hall, restaurant)
    • attach the word 'confidential' to sensitive documents and use sealed envelopes marked as 'confidential'
    • limit as much as possible the copying of confidential documents
    • if appropriate, have the persons who consult this confidential information sign a register
    • restrict access to especially sensitive information to the persons who need to be informed
    • at the request of the Board of directors or at the initiative of the Chairman of the Board of directors or the CEO, maintain and regularly update a list of the persons who have access to confidential information
    • never leave confidential information unattended
    • when faxing/mailing confidential information, always check the fax number/mail address and verify that someone with access to this information is present to receive the information

    The above guidelines are not exhaustive. Moreover, in specific circumstances, all other appropriate measures must be taken. In case of doubt, the relevant person should contact the compliance officer.

     

    III. 1.6. Prohibition against market manipulation

    In accordance with Article 25, § 1.2° of the Belgian Act of 2 August 2002 on the supervision of the financial sector and financial services, each insider is prohibited from:

    • executing transactions or placing orders
      • that give or could give false or misleading signals concerning the supply of, demand for, or the price of one or more financial instruments
      • or in which one or more persons, acting in collaboration, keep the price of one or more financial instruments at an abnormal or artificial level, unless the person who executed the transactions or placed the orders establishes that his or her reasons are legitimate and that the relevant transactions or orders correspond to the normal practices in the relevant market
    • executing transactions or placing orders using fictitious constructions or any other form of fraud or deception
    • spreading information or rumours through the media, the Internet or any other means that gives or could give incorrect or misleading signals concerning financial instruments, in situations in which the relevant person knew or should have known that the information was false or misleading
    • carrying out other acts determined by the King on the advice of the FSMA that impede or disrupt, or could do so, the proper operation, integrity and transparency of the market; participating in any meeting that aims to execute the transactions referred to in (1) through (4)
    • encouraging one or more other persons to engage in acts that, if he or she were to execute them him/herself, would be prohibited in (1) through (4)

     

    III. 1.7. Management of funds by third parties

    When a relevant person allows his/her funds to be managed by a third party, the relevant person will impose on this third party an obligation to observe the same restrictions with respect to transactions with financial instruments of the company that apply to the relevant person him/herself with regard to transactions concerning financial instruments.

    An exception exists when the third party has discretionary management on the basis of a written agreement and the relevant person exercises no influence on the third party's management and the choice of financial instruments, and the third party did not consult the insider about such.

     

    III. 1.8. Disclosure obligation concerning significant holdings

    The relevant persons agree to comply with Article 10, section 3 of the company's articles of association: “The quotas that require notification in the case of threshold overruns for application of the legislation concerning the disclosure of important holdings are set at 3%, 5% and multiples of 5%.”

     

    III. 1.9. Term

    Without prejudice to compliance with the applicable laws and regulations, the relevant persons are bound by this Dealing Code for three months after they terminate their position in the company.

     

    III. 1.10. Changes

    The Board of directors reserves the right to change this Dealing Code. The company shall inform the relevant person of these changes and make available copies of the amended code.

     

    III. 1.11. Privacy

    The information provided by the relevant person in accordance with this Dealing Code will be handled by the chairman of the Board of directors in accordance with the Belgian Act of 8 December 1992 on the protection of personal privacy, as amended by the Belgian Act of 11 December 1998 ('Privacy Act') for the purpose of preventing the abuse of Insider Information. Under the Privacy Act, each relevant person has access to his/her personal information and he/she has the right to correct any errors.

 

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