INSIDER POLICY

This insider policy[1] sets out the code of conduct of Endomines Finland Plc and its group companies (jointly referred to as the “Company”) with regard to inside information and transaction-related procedures. In insider matters, the Company complies with the EU Market Abuse Regulation ((EU) 596/2014, as amended, the “MAR”) and with all lower-level regulation issued pursuant thereto as well as with the Finnish Securities Markets Act (746/2012, as amended, the “SMA”), guidelines issued by competent public authorities, and the Guidelines for Insiders published by Nasdaq Helsinki Ltd (the “Stock Exchange”). The rules and guidelines of the Stock Exchange are available at https://www.nasdaq.com/solutions/rules-regulations-helsinki.

This insider policy applies to all persons employed by the company and its group companies as well as to all members of the company’s board. In addition, this insider policy applies to all other parties that otherwise act for the company or on its behalf when these parties carry out duties that grant them access to inside information. For example, advisers, auditors, and external credit assessment institutions may constitute such parties.

 

THE DEFINITION OF INSIDE INFORMATION

Inside information refers to information of a precise nature that has not been made public and which directly or indirectly relates to the company and which, if it were to be made public, would likely have a significant impact on the prices of the company’s financial instruments or related derivative financial instruments (“Inside Information”).

Information will be deemed to be of a precise nature if

  • it indicates a set of circumstances which exists or an event which has occurred, or
  • a set of circumstances which may reasonably be expected to come into existence or an event which may reasonably be expected to occur; and
  • it is sufficiently accurate in order to be able to conclude on the potential effect that any of the aforementioned circumstances or events may have on the prices of the company’s financial instruments or related derivative financial instruments.

Information will be considered not to have been made public if the information has not been published or if it has not otherwise been available on the market. For example, information that has been leaked to the public does not constitute Inside Information, although the SMA may oblige the affected party to publish the leaked information so that all investors have equal and consistent access to sufficient information on factors that may have a material impact on the value of the securities involved.

Pursuant to the criterion of significance, information which would likely have a significant effect on the price of the financial instrument involved means information that a reasonable investor would be likely to use as part of the basis of its investment decisions.

The company will determine whether specific information constitutes Inside Information on a case-by-case basis. For example, the following information may constitute Inside Information for the company:

  • a decision to invest
  • a partnership agreement or some other material agreement
  • the sale of a company or a specific business
  • new business partnership arrangements
  • information concerning the company’s strategy or the company’s exploration plans or their results
  • information concerning the company’s mineral resources or mineral deposits
  • the results of geological surveys/feasibility studies
  • delays or problems encountered during the implementation of planned or ongoing projects or their suspension
  • entry to new markets
  • position in new market segments
  • the initiation of legal proceedings, decisions issued during legal proceedings, or the settlement of the matter
  • financial hardship
  • decisions issued by the public authorities
  • a shareholders’ agreement that the company has become aware of and which may affect the exercise of voting power in the company or the transferability of the company’s shares
  • market rumours and leaks
  • auditor’s report
  • agreements concerning the liquidity providing
  • information concerning the issuance of securities or the acquisition or sale of the company’s treasury shares
  • related party transactions
  • auditor’s reports
  • changes in the company’s result or financial status
  • material changes in the company’s operations.

If the inside information pertains to proceedings that involves different phases, each phase as well as the entire proceeding can be considered to constitute inside information. An intermediate phase in a complex proceeding must be considered to constitute inside information if it meets the criteria established above for inside information as it is.

In this insider policy, the term financial instrument refers to both the company’s shares and all other kinds of financial instruments issued by the company, such as options.[2]

  1. Public disclosure of inside information and delay of disclosure

The company must consistently review the company’s projects and e.g. new agreements in order to determine whether these could constitute Inside Information. The company must make Inside Information that directly pertains to the company public as soon as possible, unless the disclosure of the Inside Information has been delayed.

The company’s board decides on the disclosure of inside information. In exceptional circumstances, the CEO or the chair of the board can decide to disclose the relevant information, provided that such disclosure is justified due to the urgency of the matter.

The decision to delay the disclosure of inside information to the public is made by the company’s board. In exceptional circumstances, the CEO or the chair of the board can make the decision to delay disclosure on their own, provided that it is justified due to the urgency of the matter. The decision will be made after it has been assessed as to whether the conditions for delaying the disclosure of Inside Information are met. The decision will be documented. The insider manager is responsible for documenting the assessment and the decision to delay disclosure and for the retention of relevant documentation.

The Company may delay the disclosure of Inside Information if all the following preconditions are met:

  1. immediate disclosure is likely to prejudice the legitimate interests of the company;
  2. the delay in disclosure is not likely to mislead the public; and
  3. the company is able to ensure the confidentiality of the relevant information.

When delaying the disclosure of Inside Information, the company must especially ensure that non-disclosure does not give any wrong or misleading signals with regard to the company’s financial instruments as this could be considered to constitute prohibited market manipulation.

The preconditions for the delay in disclosure must consistently be met for the entire duration of the delay, i.e. until the inside information has been published or the relevant project has been cancelled. The company can, at its own risk, decide to delay the disclosure of Inside Information that relates to a long-term proceedings executed in phases if the aforementioned preconditions are met.

When the company finally discloses inside information whose disclosure has been delayed, the insider manager must promptly notify the Finnish Financial Supervisory Authority (the “FIN-FSA”) of the delayed disclosure. The insider manager is responsible for filing the aforementioned notification with the FIN-FSA. The FIN-FSA can, where necessary, request the issuer to provide a report detailing how the preconditions for delayed disclosure were met and other information relating to the Inside Information whose disclosure was delayed.

If the insider project is cancelled, the company is not obliged to disclose information regarding the project to the public or to file a notification regarding delayed disclosure with the FIN-FSA.

 

INSIDER LISTS

If the company decides to delay the disclosure of inside information, it must immediately establish an insider list concerning the relevant inside information. The decision to establish an insider list is made by the board. In exceptional circumstances, the CEO or the chair of the board can make the decision to establish an insider list on their own, provided that it is justified due to the urgency of the matter. The company’s insider manager compiles and maintains the insider lists. The company’s inside information typically concerns an individual set of measures or an arrangement prepared confidentially in the company, which would likely have a significant impact on the prices of the company’s financial instruments or related derivatives if realised (a “Project”).

Each person to whom project-specific inside information is disclosed must promptly be added to the project-specific insider list. Persons added to an insider list must provide the information requested by the company for the purposes of compiling and maintaining the relevant list.

The insider list must always be updated without delay if

  • a change occurs in the reason why a specific person is already included in the insider list,
  • a new person gains access to the relevant Inside Information and must then be added to the insider list as a result, or
  • a person ceases to have access to the relevant Inside Information.

All persons added to an insider list will be informed in writing of their addition to the insider list and of the resulting obligations as well as of the sanctions applicable to insider dealing and to the unlawful disclosure of inside information. This notification can also be provided as an email message. The company will also notify all persons recorded in the insider list after the insider project has ended.

The insider list must be kept updated electronically in a format that disallows alteration after the fact. Insider lists are not public, but the FIN-FSA is entitled to request information concerning the contents of the lists for the purposes of carrying out its supervisory duties.

 

PROHIBITED USE OF INSIDE INFORMATION

The use and disclosure of Inside Information is prohibited

The abuse and unlawful disclosure of Inside Information is prohibited. The prohibition of insider dealing and the unlawful disclosure of inside information applies to all natural and legal persons that have gained access to inside information regardless of how and where they gained access to the said information if the person is or should be aware that the information they possess is inside information. The use and disclosure prohibitions that apply to inside information apply regardless of whether the relevant person has been added to the project-specific insider list and whether they are subject to a trading restriction. The use and disclosure prohibitions that apply to Inside Information remain in force until the relevant information has been published or has otherwise lost its confidential nature e.g. because the relevant insider project has ended.

A person cannot

  • engage or attempt to engage in insider dealing;
  • recommend that another person engage in insider dealing or induce another person to engage in insider dealing; or
  • unlawfully disclose Inside Information.

Pursuant to Chapter 51 of the Criminal Code of Finland, the abuse of inside information is punishable in both its standard and aggravated form. In addition to the acquisition or transfer of financial instruments, the act of cancelling or altering an assignment concerning a financial instrument is also punishable. Furthermore, instructing another to acquire or transfer a financial instrument or to cancel or alter an assignment involving a financial instrument based on Inside Information is also punishable. The unlawful disclosure or conveyance of Inside Information may also result in criminal liability.

 

Insider dealing

Insider dealing refers to assignments where a person is in possession of inside information and uses it by directly or indirectly acquiring or conveying financial instruments to which the inside information pertains on their own behalf or on the behalf of a third party. In addition, the act of cancelling or altering an assignment involving a financial instrument based on inside information is also considered to constitute insider dealing.

 

Recommending and inducement

A person in possession of inside information is not allowed to use the said information to recommend that another person acquire or transfer financial instruments to which the information pertains or to induce them to do it. It is also prohibited to recommend that another person cancel or alter an assignment involving a financial instrument under such circumstances or to induce them to do it.

 

The unlawful disclosure of Inside Information

The disclosure of inside information is considered unlawful when a person is in possession of inside information and discloses it to others, unless such disclosure constitutes part of the regular conduct of the work, profession, or duties of the person disclosing the information.

Even if a justifiable reason exists for the disclosure of inside information and the said information is disclosed as part of the regular conduct of the work, profession, or duties of the person disclosing the information, the relevant inside information cannot be disclosed without first ascertaining that the recipient is appropriately obliged to keep the information secret. The recipient of the inside information must also be added to the project-specific insider list, and they must be made aware of the related obligations.

 

Market sounding

Market sounding refers to the communication of information to one or more potential investors prior to the announcement of a transaction relating to the company’s securities (such as a subscription rights issue or an accelerated book building) in order to gauge the interest of potential investors in the possible transaction and the conditions relating to it on the financial and/or capital markets. Market sounding can be carried out either by the company itself or by service providers acting for the company or on its behalf. If the market party disclosing the information complies with the provisions set out in the MAR,[3] the disclosure of information is not considered to breach the disclosure prohibition that applies to inside information, but rather such a disclosure is considered to have occurred as part of the regular conduct of the work, profession, or duties of the person disclosing the information (a so-called safe harbour provision).

Before market sounding can be commenced, the company’s CEO, CFO, or board must be contacted in advance, and detailed internal guidelines and procedures must be drawn up for market sounding and complied with whenever conducting market sounding.

 

THE OBLIGATION TO DISCLOSE TRANSACTIONS CONCLUDED BY MANAGERS AND PERSONS CLOSELY ASSOCIATED WITH THEM

 

Managers and the persons closely associated with them

The Company’s management has determined that the following persons constitute persons discharging managerial responsibilities within the meaning of Article 3(1)(25) of the MAR (“Managers”):

  • members of the Company’s board;
  • the CEO; and
  • the members of the management team.

The insider manager will notify the Managers of their obligations.

A person closely associated with a manager refers to the following persons within the meaning of Article 3(1)(26) of the MAR:

  1. the manager’s spouse or their partner in a registered partnership or their common law spouse, who has lived together with the manager in the same household at least for the past five years or who has, or has had, a child with the manager or joint parental custody over a child;
  2. a dependent child;[4]
  3. a relative who has shared the same household for at least one year on the date of the transaction concerned;[5] or
  4. a legal person, trust or partnership,[6] the managerial responsibilities of which are discharged[7] by a person discharging managerial responsibilities or by a closely associated person mentioned above, or which is directly or indirectly controlled[8] by such a person, or which is set up for the benefit of such a person, or the economic interests of which are substantially equivalent to those of such a person.

The companies referred to above in subsection 4 comprise e.g. companies where the person in question serves as a board member or as a senior executive.

The managers must notify the persons they are closely associated with of their obligations in writing/form and retain a copy of the notification.

The company will maintain a list of its managers and of all persons closely associated with them. The list is not public. Managers must submit information concerning their close associates to and notify the company of any changes in this information without delay and at the latest within three days of such change. These notifications must be submitted via email to the insider manager. The company must contact each manager at least once a year to ascertain whether their list of disclosed closely associated persons should be updated.

 

Transactions subject to the disclosure obligation

The managers and the persons closely associated with them are obliged to disclose all transactions concluded on their own account in relation to the company’s financial instruments once the maximum limit of EUR 5,000 has been reached during the applicable calendar year. This limit is calculated by adding all transactions conducted with the company’s financial instruments during the applicable calendar year together without netting.[9]

Transactions subject to the disclosure obligation include e.g. the following transactions that involve financial instruments:[10]

  • acquisition, disposal, subscription, or exchange;
  • pledging or lending;
  • gifts and donations made or received, and inheritance received;
  • transactions undertaken by persons professionally arranging or executing transactions on behalf of a manager or a person closely associated with a manager, including where discretion is exercised; and
  • transactions made under a unit-linked life insurance policy where the policyholder is a manager or a person closely associated with a manager and where the investment risk is borne by the policyholder and where the policyholder has the power or discretion to make investment decisions.

The disclosure obligation applies to transactions that are conducted with e.g. the following financial instruments:

  • the Company’s listed and unlisted shares;
  • the Company’s debt instruments, such as bonds and convertible loans, money market instruments (such as certificates of deposit and commercial papers), and interest rate certificates;
  • derivatives related to the Company’s shares and debt instruments, such as options, futures, swaps, warrants, credit risk derivatives, and margin agreements;
  • index products and baskets where the share of the Company’s financial instrument exceeds 20% of the product’s funds;[11] and
  • shares in mutual and alternative investment funds (UCITS/AIF) where the share of the Company’s financial instrument exceeds 20% of the product’s funds.[12]
  • Disclosing transactions

The information concerning the manager’s transactions can be found at  https://endomines.com/investors/materials/releases/

The managers and the persons closely associated with them must notify the FIN-FSA of any transactions they conclude without delay and at the latest within three working days of the execution of the transaction (T+3). The notification is made through the FIN-FSA’s electronic service at https://asiointi.finanssivalvonta.fi/en/login in accordance with the instructions on the FIN-FSA’s website.

The managers and the persons closely associated with them must also notify the company of any transactions they conclude without delay and at the latest within three working days of the execution of the transaction (T+3). This notification is made by sending a summary of the electronic form sent to the FIN-FSA to the company’s email at: info@endomines.com.

The managers and the persons closely associated with them can authorise another person to submit the aforementioned transaction notification on their behalf.

The company will publish all transaction notifications it receives by issuing a stock exchange release without delay and no later than two working days[13] after it has received the applicable transaction notification from a manager or a person closely associated with them. The company will not separately assess whether the notifications it receives are correct.

 

TRADING RESTRICTIONS

Trading restrictions imposed on persons entered in the project-specific insider list

Any person who has received inside information will not be allowed to trade in the company’s financial instruments during the project.  The restriction will be in force as long as the person is involved in the project concerned or until the project is duly closed. The trading restriction will be in force until the project is completed, even if the employment or service relationship of the person entered in the project-specific insider list ends during the project.

For the avoidance of doubt, the prohibitions regarding insider dealing and the misuse and disclosure of Inside Information, in addition to the trading restrictions, will always be in force if the relevant person possesses Inside Information.

 

Closed period

The members of the company’s board of directors and the management team are not allowed to trade in the company’s financial instruments directly or indirectly on their own account or for the account of a third party during the closed period. Furthermore, any persons who contribute to the preparation of the company’s financial reports as well as other persons specified by the company are not allowed to trade in the company’s financial instruments directly or indirectly on their own account or for the account of a third party during the closed period (the so-called extended closed period).

The closed period begins 30 days before the publication of the financial statements report, interim reports or half-year reports, and it ends 24 hours after the publication. In other times, trading in the company’s financial instruments is allowed, provided that the relevant person is not entered in the project-specific insider list at the time concerned or that the person does not otherwise possess Inside Information.

The Company may also impose other trading restrictions.

 

Exemptions from the trading restrictions during the closed window period

The Company may grant a permission to trade on one’s own account or for the account of a third party based on its case-by-case discretion during the closed window period in the following situations under Article 19(12) of the MAR:

  1. due to the characteristics of the trading involved for transactions made under, or related to, an employee share or saving scheme, qualification or entitlement of shares, or transactions where the beneficial interest in the relevant security does not change; or
  2. on a case-by-case basis due to the existence of exceptional circumstances, such as severe financial difficulty, which require the immediate sale of shares.[14]

The board of directors decides whether the Managers are granted permission to trade in the Company’s shares or other financial instruments during the closed window period.

Regardless of the trading restrictions, concluding a transaction with the Company’s financial instruments is always prohibited if the person intending to trade possesses Inside Information concerning the Company or its financial instruments.

 

Trading schemes

Persons who have occasional or regular access to the Company’s Inside Information may conclude transactions with the Company’s financial instruments regardless of their potential possession of Inside Information by establishing a trading scheme that meets the conditions set out in the applicable legal provisions. In a permissible trading scheme, the relevant party gives the stockbroker an assignment to independently conduct transactions within the limits of the applicable assignment. However, a trading scheme may only be established at a moment when the person in question does not possess Inside Information and is not subject to any trading restrictions.

 

ADMINISTRATION OF INSIDER MATTERS

 

Contact persons

The company’s insider manager is the communications specialist of the company. The company’s insider manager is responsible for compiling and maintaining the company’s insider lists, and for the management of the trading restrictions as well as for the reception and disclosure of transaction notifications. The company’s insider manager is also responsible for the internal communications and training related to insider issues. The CFO or another person appointed by the insider manager will act as a substitute for the company’s insider manager.

 

Obligation to provide training and information

The company ensures that the persons subject to insider rules are aware of their position as insiders and the effects thereof. Insiders will receive training and information on insider matters at the beginning of their employment, when they become insiders, and when the applicable laws or the regulations issued by the authorities or the guidelines issued by the Stock Exchange or the company’s insider policies and procedures are amended. In addition, the company may organise training sessions at other times in order to maintain a high level of awareness of and know-how related to insider matters among its employees.

Regardless of this insider policy and other guidelines issued by the company, each company employee is always personally responsible for complying with the applicable laws, regulations and guidelines related to inside information. Each employee must, therefore, in each case personally assess whether the information they possess is inside information, and comply with the applicable provisions relating thereto. This obligation applies at all times regardless of whether the employee has been added to an insider list or how they have received Inside Information or if they have become aware of Inside Information e.g. by accident.

 

Supervision

The FIN-FSA monitors that insider rules are complied with, including that insider lists are compiled and kept up-to-date, that managers comply with the applicable trading restrictions, that the managers and their close associates abide by their disclosure obligation, and that the transactions are published as required.

A breach of the insider rules may lead to various consequences:

  • Pursuant to the Criminal Code of Finland, the use of Inside Information in a prohibited manner may lead to a fine or to a sentence of imprisonment of up to four years whereas the unlawful disclosure of Inside Information may lead to a fine or to a sentence of imprisonment of up to two years;
  • Pursuant to the SMA, the use of Inside Information in a prohibited manner or any unjustified disclosure of Inside Information may result in a sanction imposed by the FIN-FSA;
  • If a person employed by the company breaches the guidelines or provisions set out in this insider policy, the company may, depending on the nature of the breach, have the right to issue a warning to the person or to dismiss the person and/or to terminate the employment or other contract of such person without notice.

The company has internal procedures in place for employees to report any breaches of financial markets regulation in the company. The employees may submit their reports through the company’s shared whistleblowing channel at https://report.whistleb.com/en/endomines. All reports are processed as confidential, and the identities of the person who submitted the report and the person subject to the report are kept confidential, unless the disclosure thereof is necessary in order to process the report or if otherwise required by the applicable laws. The CEO of the company or the company’s board, as the case may be, will be responsible for making sure that the person who submitted the report will be protected against counteractions or threatening of such actions.

 

ADOPTION AND ENTRY INTO FORCE

The board of directors of the company has adopted this insider policy. This insider policy supersedes any previous policies or guidelines.

 

 

[1] Comment: A company seeking to list itself on the Stock Exchange must be ready to comply with a statutory disclosure obligation as from the moment when the company files its listing application, i.e. the insider policy will enter into force when the company files its listing application.

[2] The term ‘financial instrument’ can refer to any financial instrument set out in Article 4(1)(15) of Directive 2014/65/EU, i.e. for example, transferable securities; money-market instruments; units in a UCITS; options, futures, swaps, warrants, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields; derivative instruments for the transfer of credit risk and financial contracts for differences; other derivative instruments or financial indexes whose commodities can be settled with a physical transfer or in cash.

[3] Comment: Rule: Article 11(3) and (5) of the MAR

[4] The term ‘dependent child’ refers to a child who has not yet turned 18. Once a child who resides in the same household as the Manager has turned 18, they will be considered a relative who shares the same household as the Manager.

[5] The term ‘relative’ refers here to the relatives listed under Chapter 2 of the Finnish Code of Inheritance (40/1965, as amended), such as children, grandchildren, parents, grandparents, and siblings.

[6] The term ‘legal person’ refers here to all kinds of legal persons, such as limited liability companies, limited liability housing companies, foundations, and registered associations as well as company forms or arrangements that are not recognised by Finnish law, such as trust arrangements concluded under common law systems.

[7] With regard to issuers, the term ‘discharging managerial responsibilities’ means here that the issuer has determined that the relevant person discharges managerial duties in the said issuer, and with regard to private corporations, that the person serves as a member or deputy member of the board of directors or the administrative board or as the managing director or their deputy or in a comparable role within the said corporation.

[8] The term ‘controlled entity’ refers here to the controlled entities defined in Chapter 2 Section 4 of the Finnish Securities Markets Act (746/2012, as amended).

[9] All transactions involving securities are added together.

[10] The full list is available in the Commission Delegated Regulation (EU) 2016/522 (Article 10). Cf. also Article 19(7) of the MAR.

[11] On the condition that the relevant Manager or the person closely associated with a Manager is aware or could have been aware of the structure of the relevant fund. The disclosure obligation does not apply to funds whose structure is not public. In addition, the disclosure obligation only triggers when the relevant person makes an investment in the fund or changes their investment. Transactions conducted by the fund itself do not need to be disclosed, except where the Manager or the person closely associated with a Manager can influence the investment decisions made by the fund.

[12] On the condition that the relevant Manager or the person closely associated with a Manager is aware or could have been aware of the structure of the relevant fund. The disclosure obligation does not apply to funds whose structure is not public. In addition, the disclosure obligation only triggers when the relevant person makes an investment in the fund or changes their investment. Transactions conducted by the fund itself do not need to be disclosed, except where the Manager or the person closely associated with a Manager can influence the investment decisions made by the fund.

[13] Comment: Rule: Article 19(3) of the MAR. Cf. also p. 7:

https://www.finanssivalvonta.fi/globalassets/fi/tiedotteet-ja-julkaisut/julkaisut/markkinat_2020/markkinat_tiedote_2_2020.pdf.

[14] Comment: Only in the event of unusually exceptional, unexpected and compelling circumstances, e.g. a court order or tax debt (the prerequisite is that the commitment cannot be met without selling shares). Cf. sections 149–162 and pages 56–57 of the guidelines issued by ESMA (https://www.esma.europa.eu/sites/default/files/library/2015/11/2015-224.pdf).