Rules of concluding transactions by the insiders with Company’s financial instruments

Rules of concluding transactions by the insiders with Company’s financial instruments

These rules set requirements for insiders performing operations with insider financial instruments of the Company.

The rules establish restrictions and/or prohibitions with regard to effecting transactions with insider financial instruments of the Company as well as actions required for compliance with the Law, normative legal acts as may be adopted in accordance therewith and other applicable norms and rules.

The rules shall be applied with regard to any operations effected by insiders with insider financial documents no matter whether such persons are in possession of insider information and/or other publicly unavailable details of such insider financial instruments and such financial instruments issuer.

These rules shall not be applied in case of shares acquisition during implementation of the Company option program approved by the Board of Directors of the Company; however, they may be applicable to other or future option programs of the Company if such option programs conditions fail to include special rules for protection against unlawful usage of insider information.

Rules for concluding insider transactions with financial instruments of the Company

2.1. Department for control of insider information may recommend insiders of the Company that own Company’s insider financial instruments to refrain from making transactions with these instruments at a certain periods of time.

Recommendations to insiders may be sent by e-mail, fax, post.

2.2. If the insider transactions with financial instruments of the Company in the interests of insider are carried out by third parties, the insider must ensure observance of recommendations of the Department for control of insider, except when under a contract with a third party to carry out transactions an insider is not able to influence decisions on transactions concluded by a third party.

2.3. All insiders of the Company shall inform the Company and the FFMS of Russia on concluded transactions with the Company’s securities.

Notifications should be sent within 10 (ten) business days from the date of the transaction:

- to Department for control of insider information – IDGC of the South JSC, 49 Bolshaya Sadovaya str., Rostov-on-Don, 344002

- to the Federal Financial Markets Service of Russia (FFMS of Russia): 9 Leninskiy Prospekt GSP-1 Moscow 19991.

Notification form is available on the website www.mrsk-yuga.ru (Annex 8) or in order of FFMS of Russian dated 21.01.2011 No.11-3-пз.

2.4. Insiders of 1, 2 and 3 categories within 30 calendar days after the end of the reporting period are required to submit to the unit responsible for the control of insider information a written confirmation of the amount of securities held by an insider of the Company as of the date of the reporting quarter and committed transactions during the reporting quarter (Annex 7).

The application form shall contain information on the Company’s insiders owing, including through a nominee holders of securities and other third parties, the Company's financial instruments and transactions with concluded with them (either directly or through other persons acting on their behalf) for the reporting quarter.

2.5. Insiders of category 1 shall within 30 calendar days from the date of the election/appointment of write a notice to the unit responsible for the control of insider information about the fact and the number of insider’s financial instruments in the form presented in Annex 6.

2.6. Insiders of category 1 must comply with the requirements of these rules until the expiration of six months after the person has ceased to belong to the insiders of category 1.

2.7. The filled-in and signed by insiders of the Company Application forms 6, 7, 8 are to be submitted to the Department for control insider information via post, e-mail or personally.