Exploring Corporate Governance Around the World

By Allison Garrett, Senior Vice President for Academic Affairs at Oklahoma Christian University

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.

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