The Financial Supervisory Commission (FSC) is to take a tougher stand on the publication of client notes written by securities houses about the stock prices of listed companies in a bid to curb price speculation, the regulator said yesterday.
The idea to impose the restrictions is a response to the practice by some brokerages of frequently leaking such notes to the media with the apparent aim of manipulating stock prices, in violation of securities transactions regulations, the commission said.
“We plan to require securities houses — domestic and foreign — to issue stock filings to clarify media reports on the earnings forecasts for listed companies,” said Wu Yui-chun (吳裕群), director-general of the commission’s Securities and Futures Bureau.
“The commission will take legal action against violators if necessary, as irresponsible circulations of earnings forecasts or comments may cause irreparable damage to the investors and companies involved,” Wu said.
After local media reported the news that the commission would tighten regulations on brokerages’ equity reports, the TAIEX dropped 1.34 percent, or 131.17 points, to close at 9315.85, Taiwan Stock Exchange data showed.
Foreign institutional players cut their local share holdings by a net NT$1.04 billion (US$34.6 million) yesterday, compared with a net increase of NT$8.3 billion a day earlier, stock exchange statistics indicated.
FSC Chairman William Tseng (曾銘宗) said in a press conference that he respected all brokerages’ investment strategies, shrugging off rumors that the sell-off on the bourse had anything to do with the announcement of the planned regulatory tightening.
“All we want is to make securities houses take full responsibility for their reports, which are intended for their clients, but repeatedly end up in the hands of the media,” Tseng said, refusing to name any of the offenders.
Under the planned restrictions, which would likely take effect by the middle of the month, brokerages should assert their intellectual property rights over the reports and issue clarifications if media outlets run stories based on their reports that are out of context, Tseng said.
Stock analysts make earnings forecasts on the condition that the company in question meets certain criteria, but media outlets on reporting these predictions frequently leave out those conditions and relevant time sensitivity, which can mislead investors, Tseng said.
The commission said it expects the move to correct the longstanding impression that it is soft on foreign securities houses and hopes the tightening does not encroach on the freedom of the press.
However, Wu said that share price, profit and revenue figures fall outside the protection of free speech, while stock ratings and comments on the industry’s outlook are harmless.
There is little the commission can do to offshore brokerages if they disseminate client notes on the share prices of Taiwanese companies through foreign media outlets, Wu said, as Taiwan has no authority over them.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure