Management of company information

During the meeting of December 21, 2006, the Company’s Board of Directors - in compliance with the provisions on the management of privileged information aimed at preventing insider trading and with the provisions of Article 4 of the new Governance Code, of Article 114, paragraph 1, and of Article 181 of the Consolidated Law on Finance, approved a specific regulation for the management and treatment of confidential information, which also includes the procedures for disclosing documents and information on the Company and its subsidiaries outside of the Company, with specific reference to the confidential information provided for by paragraph 1, Article 114 of the Consolidated Law on Finance.

This regulation represents an update to the measures included in the regulation that Terna approved as of April 2004, with specific reference to “price sensitive” information. It aims at maintaining the secrecy of confidential and privileged information while at the same time ensuring the disclosure of correct, complete, adequate, timely and objective Company information to the market relating to Company’s data. The regulation also sets the guidelines for the subsidiaries, so that they will provide Terna with all the necessary information for it to meet the disclosure requirements of the Law. The Directors and Statutory Auditors of Terna and its subsidiaries are required to comply with the provisions of this regulation and, in any case, keep all documents and information acquired in the performance of their duties, as well as the content of any discussions during Board meetings, confidential.

The regulation generally entrusts the Company’s CEO and the delegated bodies of the subsidiaries with the management of confidential information for which they are responsible, providing that such information on individual subsidiaries should be disclosed with the prior authorization of the Company’s CEO.
Moreover, the regulation establishes specific procedures to be followed when disclosing Company documents and information outside the Company - with particular focus on the disclosure of privileged information. It also scrupulously governs the way in which members of the Company should deal with the press and other mass communication means (i.e. financial analysts and institutional investors).
Lastly, the new regulation introduced specific “Measures for persons committing violations” into the regulation’s provisions.
In compliance with the provisions of Article 115-bis of the Consolidated Law on Finance and with the regulatory measures issued by CONSOB, Terna’s Board of Directors created a specific Register of people with access to privileged information within Terna. It also prepared a specific regulation to govern how the Register should be held and updated. The same regulation requires that subsidiaries also create their own Registers.
As of April 2004, the Company’s Board of Directors also approved the internal dealing Governance Code, in compliance with the regulatory measures laid down by Borsa Italiana S.p.A., establishing the market transparency requirement for listed companies with respect to significant transactions, involving the financial instruments of these companies or their subsidiaries, carried out by people with significant decision-making powers in the companies and with access to price sensitive information (“relevant persons”).

Following the entrance into force of the new internal dealing regulations that were introduced by Law no. 62 dated April 18, 2005 (“2004 Community Law” that integrated the provisions of Article 114 of the Consolidated Law on Finance) and of the relative implementing provisions (articles from 152 sexies to 152 octies and Attachment 6 of the Issuer Regulations), Terna adopted a specific internal Procedure to identify Terna’s “relevant persons” and to manage, handle e disseminate to the market information regarding financial instruments of the Company.
Within this Procedure – that was updated on March 19, 2010 based on CONSOB explanations and on the structural asset of the Company – Terna deemed appropriate to maintain, for the “relevant persons” identified, the obligation to refrain – either directly or indirectly – from carrying out transactions that are subject to internal dealing regulations during two blocking periods in concomitance with the approval of the draft financial statement and of the half-year report by Terna’s Board of Directors.

This procedure is available in the Company’s website in the “Investor Relations/Corporate Governance/Internal Dealing” section. The procedure includes the following qualifying elements, which are considered adequate in heightening its qualitative content:

  • application of internal dealing transparency obligations towards “relevant persons” within the Company and its subsidiaries as identified in the procedure (in addition to Terna’s Directors and Standing Auditors);
  • “relevant persons” are not allowed to carry out transactions (other than the exercise of options) during the 30 days before the approval of the draft financial statements and half year report by Terna’s Board of Directors. Moreover, the Board can establish additional blocking periods during the year, following specific events;
  • an adequate penalty system was created for “relevant persons” identified as violating the measures of this procedure.

Adjustments to the Procedure adopted by Terna are underway, in order to incorporate the simplification changes to legislation made by Article 152 septies of the Issuer Regulations pursuant to CONSOB resolution no. 18079 dated January 20, 2012, published in the Official Journal on February 7, 2012, aimed at combining market competitiveness and the necessary protection of investors, and relative to the reporting thresholds of transactions subsequent to those which were already reported.