Wednesday, August 09, 2006
Taiwan's New Insider Trading Law
On May 30, new insider trading regulations adopted by Taiwan's Financial Supervisory Commission went into effect. A summary is here on the Asian Corporate Governace Association's web site.
Article 157-1 of the rules prohibits related persons from trading in an issuer's stock while in possession of material non-public information, or within 12 hours of release of the information. The implication of the 12-hour time frame must be that many stocks traded in Taiwan are thinly traded, meaning the market is not very efficient. Otherwise, for broadly traded stocks, a lesser time frame would be sufficient for the market to absorb the newly disclosed information. The new rule also contains a lengthy list of the types of information that would be considered "material."
The Asian Corporate Governance Association has a terrific compilation of the laws and rules regarding governance of assorted countries under Library -- Codes and Rules on its home page. Here is a link to the ACGA's home page.