Government addresses insider training

The government has decided to expand the definition of "insiders" to include board members who have resigned in the last six months and representatives sent to a board by institutional investors, as part of its effort to crack down on insider trading.

Officials the Financial Supervisory Commission (FSC) said that amendments to the Securities and Exchange Law (證交法) will also include banning insiders from trading within 12 hours after important news regarding a company has been publicized.

As to the definition of "major news regarding a company" and how it is to be made public, this will be the job of responsible government agencies which will establish guidelines based on the principles of "strict legal provisions" and "clear and unambiguous violations" while also taking into account any changes in the market.

In addition, compensation in civil disputes will be changed from the current "limited maximum amount" to "compensation amount," meaning the difference between the selling or buying price on the disputed day and the average price of the closing price in the 10 days after the company news became public.

Regarding for criminal offenses, FSC officials said violators will be punished with a sentence of three to 10 years in jail plus a fine of between NT$10 million and NT$200 million (US$9.3 million).