萬國法律事務所

The Financial Supervisory Commission (FSC) announced on November 2, 2010 that, in order to make the rules on disclosure of information material for the stock market more comprehensive, the definition of ‘information material’ under the “Regulations Governing the Scope of Material Information and the Means of its Public Disclosure Under Article 157-1, Paragraph 4, of the Securities and Exchange Act” will be expanded. Companies must henceforth disclose and provide explanations for (1) any search by law enforcement officers, irrespective of the nature and magnitude of the matter, (2) any information that may materially impact the company and thereby affect the company’s ability to pay company bond principal and interest (with the exception of company bond guaranteed by a bank), and (3) any material change, as compared to the preceding year, in the company’s operating profit or income before tax, or in the company’s current net profit.

With respect to the disclosure of searches of the company premises performed by law enforcement officers, FSC officials pointed out that, as the price of securities is inevitably affected by such searches, information concerning such searches must be included within the scope of material information. If such information is not disclosed, insiders of the company shall be prohibited from performing purchase and sale transactions. If the management or related personnel of the company are aware of certain searches performed on the company, whereas the investors do not have such information, the issue of insider trading will be raised.