Draft legal revision offers criteria for insider trading

This article was published by the Taiwan Headlines on March 17, 2006. It reports that according to a draft revision to the "measures governing important messages and their publication" proposed by the Financial Supervisory Commission, company insiders will commit the offense of insider trading if they attempt to profit from trading in the company's shares with knowledge of the company's important messages before their publication or within 12 hours after their publication.

The "measures governing important messages and their publication" is a subordinate law of the Securities Transaction Law. The draft revision proposed by the Financial Supervisory Commission will provide a legal basis for clear-cut definition of "important messages" in relation to insider trading.

Although insider trading is a criminal offense, few suspects were found guilty in the past due to the ambiguous definition of the offense in the Securities Transaction Law. Once the draft revision is approved by the government, issues such as the scope of important messages, the timing for their formation and the method of their publication will be clear. The scope of important messages will include those messages of the business and finance of listed companies.