Securities Trading Law
Identification of major news in insider trading
Because of the insider trading from time to time in Taiwan ’s stock trading market, how to identify major news is a very important key. Here is a brief introduction for everyone to reference and avoid touching the law:
What is major news:
According to “the information mentioned in item 1 that has a significant impact on its stock price, it refers to the company’s finances, business, or market supply and demand for the securities, and public acquisitions. Its specific content has a significant impact on its stock price, or on legitimate investment There are important implications for people ’s investment decisions; the scope, disclosure methods, and other related matters shall be determined by the competent authority. “Article 157-1, paragraph 5, of the Securities Exchange Act is clearly stated.
“Information referred to in Item 5 of Article 157 of this Law concerning the company ’s finances and business, which has a significant impact on its stock price, or on the investment decisions of legitimate investors, refers to the following One of the news: the company handles major fundraising or private equity securities, capital reduction, mergers, acquisitions, splits, share exchange, conversion or transfer, direct or indirect investment plans, or major changes of pre-opening matters.
In short, if there is a significant impact on stock prices or investment decisions, it is major news.
Time of establishment of major news:
Fact occurrence date, agreement date, signing date, payment date, entrustment date, transaction date, transfer date, audit committee or board resolution date, or other dates that can be obtained according to specific evidence, whichever comes first
Major news must be “clear” and have “specific content” before it can be recognized. In a company’s M & A case, the establishment of an M & A contract usually goes through several stages, including preliminary consultation, agreement, board resolution, and contract signing. How far the consultations between the two parties have to go before they can be considered as clear and have specific content, but become major news, which depends on the specific situation of the case and belongs to the scope of fact determination. If both parties of the merger and acquisition have a high degree of willingness, they have reached a consensus on the important points of the merger agreement (such as equity purchase price, basic structure), and when signing the letter of intent, the completion of the merger and acquisition is expected to have a significant impact on the investor ’s investment decision. It has been made clear that even if there is still the possibility of failing to complete the merger and acquisition, it cannot be said that the major news has not yet been established. This is the Supreme Court’s 107th annual Tai Fei Zi No. 75 criminal judgment.
Also refer to the so-called “preliminary letter of intent”, “letter of intent” or “non-binding letter of intent”, it is not appropriate to focus on the name (form) used, but should focus on the specific content of the document signed by the individual merger (substantial ), Not to mention the legal binding of the signed documents, nor the absolute and sole criterion of judgment, and when the specific content of the case is judged by facts, if the “Letter of Intent” can reasonably expect that a series of Circumstances or events (such as initiating on-site inspections), and may have an impact on the company ’s stock price, that is, it should be clear that it cannot be used to sign a “Letter of Intent” or “Unconstrained Letter of Intent” for a merger and acquisition case due to other cases in the past “Is there any important element in the establishment (clear) of the material news, which was a different determination of the situation, which means that there was a violation of the laws and regulations in the original judgment of this document that was inappropriate; the original judgment was confirmed in September 1995 On the 12th, it was clear that the major news was at a clear time. However, the company did not discuss the future date of this period. “On-site inspection”, whether the determination of the timing of major news is a discussion statement, does not hinder the determination of the defendant’s criminal facts, and there is also the Supreme Court’s 106 annual Tai Feizi No. 223 criminal judgment.
Judging from the two Supreme Court judgments above, even if the so-called letter of intent is signed, if the letter of intent does not specifically indicate the binding force or penalty, it is generally considered not to be binding in law, but it is still considered that the major news has been established. Cautious!