Securities Dealing Policy

11 November 2020



The Manager
ASX Market Announcements
Australian Securities Exchange
Exchange Centre
Level 4
20 Bridge Street
Sydney NSW 2000



Electronic Lodgement


Australian Foundation Investment Company Limited
Securities Dealing Policy

Dear Sir / Madam,

In accordance with ASX Listing Rule 12.10, please find attached an updated
version of the Company’s Securities Dealing Policy, effective from today.

Yours faithfully



Matthew Rowe
Company Secretary


Authorised by the Board of Australian Foundation Investment Company
Limited

Reviewed: November 2020

Securities Dealing Policy

1. Application of the policy

1.1 This policy principally applies to private dealings in the Company’s securities by
Key Management Personnel (KMP) and any Closely Connected Persons and
Entities.

1.2 For the purposes of this policy, KMP comprise :
• Non-Executive Directors of the Company; and
• Senior Executives of the Company (including the Managing Director (MD)),
as determined by the Board from time to time.

1.3 For the purpose of this policy Closely Connected Persons and Entities
includes:
• family members whose financial affairs are controlled by the KMP; or
• companies, trusts and entities controlled by the KMP.

1.4 KMP must use all reasonable endeavours to ensure that, if they have a
reportable interest in the Company’s securities as defined by the ASX Listing
Rules and Corporations Act due to a relationship with a third party, that third
party complies with this policy as if it were a KMP.

2. Prohibitions on dealing in the Company’s securities

2.1 KMP must not deal in the Company’s securities when they possess information
which, if disclosed, might have a material effect on the market price of the
Company’s securities (inside information). This is an absolute prohibition and
any such dealing is an offence under the Corporations Act.

2.2 KMP must not deal in the Company’s securities during prohibited periods (see
section 4 below) unless exceptional circumstances apply and written clearance
to deal is given (see section 5 below).

2.3 KMP must not deal in the Company’s securities for short-term purposes.
Dealings in the Company’s securities must be undertaken for investment
purposes and not for trading, that is, the intention in undertaking transactions
should be to hold the Company’s securities for a reasonable period rather than
actively, promptly or repetitively buying and selling them.

2.4 KMP must not engage in short-selling of the Company’s securities.

2.5 KMP are prohibited from using the Company’s securities as security for margin
lending arrangements or other loans. KMP must also use their best endeavours
to ensure they are not put in a position of conflict with this policy by virtue of
having margin or other loans over other securities.

Reviewed: November 2020
2.6 Senior Executives are prohibited from using financial products to protect
against or limit the risk associated with unvested Company securities they may
receive as part of their performance-based remuneration (hedging). Breaches
of the Company’s policy in this regard will normally result in the termination of
the Senior Executive’s employment.

3. Exclusions from the policy

3.1 The following situations of dealing by KMP in the Company’s securities are
excluded from this policy:
• transfers of Company securities already held by the KMP into a
superannuation fund or other saving scheme in which the KMP is a
beneficiary;
• an investment in, or trading in units of, a fund or other scheme or
arrangement (other than a scheme only investing in the Company’s
securities) where the assets of the fund or other scheme are invested at the
discretion of a third party;
• where a KMP is a trustee, trading in the Company’s securities by that trust
provided the KMP is not a beneficiary of the trust and any decision to trade
during a prohibited period is taken by the other trustees or by the investment
managers independently of the KMP;
• undertakings to accept, or the acceptance of, a takeover offer;
• dealing under an offer or invitation made to all or most of the securityholders,
such as a rights issue, a security purchase plan, a dividend reinvestment
plan, dividend substitution share plan and an equal access buy-back, where
the plan that determines the timing and structure of the offer has been
approved by the Board. This includes decisions relating to whether or not to
take up the entitlements and the sale of entitlements required to provide for
the take up of the balance of entitlements under a renounceable pro rata
issue;
• where the beneficial interest in the relevant Company security does not
change;
• transactions conducted between a KMP and their spouse, civil partner, child,
step-child or other close family member;
• cancellation of the Company’s securities as a result of failure to vest or other
forfeiture of securities received by Senior Executives as part of performance
based remuneration; and
• vesting of the Company’s securities as a result of meeting performance
hurdles or release of the Company’s securities from holding lock or holding
term in respect of securities received by Senior Executives as part of
performance based remuneration.

Reviewed: November 2020

4. Prohibited periods

4.1 For the purposes of section 2.2 of this Policy, KMP must not deal in the
Company’s securities during the following prohibited periods:
(a) the close of business on 15
th
December and 15
th
June up to and including
the calendar day after the Company’s announcement of its interim and final
financial results as applicable;
(b) the opening of business on the last business day of each month up to and
including the calendar day after the Monthly Net Tangible Asset per Share
announcement; and
(c) the duration of the pricing period for any capital management event.

4.2 The Company may impose other periods when employees are prohibited from
dealing in the Company’s securities because inside information may exist.

5. Exceptional Circumstances

5.1 A KMP who is not in possession of inside information may request and be
given clearance to sell (but not purchase) the Company’s securities when they
would otherwise be prohibited by this policy from doing so if they are in severe
financial difficulty or other exceptional circumstances apply.

5.2 A KMP may be in severe financial difficulty if they have a pressing financial
commitment that cannot be satisfied otherwise than by selling the Company’s
securities. A liability to pay tax would not normally constitute severe financial
dif ficulty unless the KMP has no other means of satisfying the liability. A
circumstance will be considered exceptional if the KMP in question is required
by a court order to transfer or sell the Company’s securities or there is some
other overriding legal requirement for them to do so.

5.3 Requests for clearance to deal in the Company’s securities during a prohibited
period involving exceptional circumstances should be made in writing (including
by email) to the individuals designated for this purpose (see section 7 below).

5.4 Where a request involves the consideration of exceptional circumstances
justifying a sale as the only reasonable course of action, particulars of those
exceptional circumstances must accompany the relevant clearance request.
The Company may be required to notify the existence of exceptional
circumstances to the Australian Securities Exchange.

Reviewed: November 2020

6. Dealing in other companies’ securities

6.1 Proposed private dealings by Senior Executives in other companies’ securities
must be referred to the investment team before execution to ensure there are
no conflicting orders in the market for that security.

6.2 Prior to undertaking private dealings in other companies’ securities, Non-
Executive Directors should consider whether there may be any potential
conflict with any of the Company’s orders. If they believe so, they should
contact the Chief Executive Officer or Portfolio Manager to verify whether any
conflicting orders exist.

6.3 Offers made to the Company for participation in IPO’s, placements or
underwritings are for the Company’s exclusive use and cannot be accepted for
private purposes either fully or partially by any KMP (this does not include
offers made directly to individual KMP).

7. Notification and approval

7.1 The Chairman (or in his absence the MD) and either the Chief Financial Officer
(CFO) or Company Secretary must be given prior notice of proposed
transactions by Directors (including the MD) in the Company’s securities. The
Chairman must give the Audit Committee Chairman or the MD and either the
CFO or the Company Secretary prior notice of proposed transactions. The
proposed transaction should take place before the next prohibited period as
detailed in section 4.


7.2 The Company Secretary, CFO or MD must be given prior notice of proposed
transactions by Senior Executives (excluding the MD) in the Company’s
securities. The proposed transaction should take place before the next
prohibited period as detailed in section 4.


7.3 Where a KMP seeks clearance to deal in the Company’s securities during a
prohibited period involving exceptional circumstances, written requests
(including via email) should be made:
• by Directors (including the MD) to the Chairman (or in his absence the MD)
• by Senior Executives (excluding the MD) to the MD (or in his absence the
Chairman).
Approval will be given in writing (including via email) and copied to the
Company Secretary who shall maintain a record of all such approvals.

7.4 The Company Secretary must be immediately advised by all KMP following a
transaction in the Company’s securities in order for any relevant announcement
to be made to the Australian Securities Exchange.

Reviewed: November 2020

7.5 For the purposes of sections 7.1 to 7.3, no KMP may be the recipient of the
prior notification of their own transaction or be the approver of their own
transaction involving exceptional circumstances.

8. Compliance and Review

8.1 KMP may be required annually and from time to time to verify in writing
(including by email) that they have complied with this policy. The Company
Secretary will maintain copies of all such verifications.

8.2 The Company Secretary is responsible for monitoring the operation of this
policy.

8.3 This policy shall be reviewed at least every three years.

8.4 Adherence to this policy is a term of employment for Senior Executives by
Australian Investment Company Services Limited.

9. Other policies

9.1 This policy should be read in conjunction with other AFIC governance policies,
including the Company’s Continuous Disclosure Policy and Corporate
Principles of Conduct.