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TSE chairman calls for revised insider trading regulation

Taiwan Stock Exchange Corp (TSE) chairman Wu Rong-i (吳榮義) and law experts urged the government on Saturday to review its regulations on insider trading and to formulate clearer and more appropriate laws.

Wu made the call in a speech on the differences between theory and practice when dealing with insider trading.

Wu said that in recent years the TSE has handed more than 100 suspected insider trading cases over to prosecutors, but that in most cases the accused were cleared of any wrongdoing.

DEFINITIONS

Regulations governing the nature and scope of "material, non-public information" for insider trading and the definition of the moment when that information becomes material are not clear, Wu said, adding that many business representatives have expressed concerns they could become inadvertently involved in insider trading.

Wu said that since assuming the TSE chairmanship, he had found that there is ample room for debate on the lawfulness of some commercial activities.

He said the key point in deciding whether an accused party is guilty of insider trading or not lies in the definition of the point at which information becomes material.

PUBLIC DOMAIN

Existing insider trading regulations stipulate that insiders -- including company directors, supervisors, managers and their close relatives -- are barred from buying or selling stocks of their company within 12 hours of the release of important information likely to affect the company's stock price.

But the problem, Wu said, is determining at what point information should be judged as being in the public domain.
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