The Financial Supervisory Commission (FSC) yesterday said that enhanced regulatory guidelines on publicly traded technology companies are be implemented next week, to ensure investors’ interests and preserve sustainable development of the nation’s equity markets.
These measures are designed to improve oversight on the listing of technology companies, the commission said.
The new measures come as some listed companies are not able to provide a steady revenue stream, resulting in difficulties forming investment strategies for the public, the commission said.
NET WORTH
The measures include new stipulations that the net worth of technology companies seeking to be listed on the local bourse must be higher than two-thirds of their total capital.
Restrictions on the trade of stocks by company insiders have also been expanded from one year to two years.
COMPANY INSIDERS
Individuals considered to be company insiders are to be extended from management, board members and major stakeholders to include research and development, as well as key technical staff.
Most notably, biotechnology companies are now required to furnish more comprehensive disclosure during releases of clinical trial outcomes for new drugs.
The new rules coincide with the troubles of OBI Pharma Inc (台灣浩鼎), which has seen its share price tumble precipitously after the company released unfavorable clinical trial results for its new breast cancer vaccine earlier this year, while surging short interest on its stock fanned allegations of market manipulation and insider trading.
New drug developers are now required to provide findings into the commercial viability of their upcoming products, other competing options treating the same disease and expected effects on earnings.
In addition, the commission will also begin monitoring for irregular short-trading activity and is to flag stocks when spikes in share loaning occur.
THIRD-PARTY REPORTS
The commission said that several industry groups are willing to provide neutral, third-party reports and information to help investors make better decisions.
“The new requirements are not directly linked to any specific biotechnology company,” outgoing commission Chairwoman Jennifer Wang (王儷玲) told a news conference in Taipei.
Wang said that a white paper on developing the nation’s financial sector and enhancing regulatory efforts has been well received by her successor, chairman-designate Ding Kung-wha (丁克華), who has pledged his support of the plans.
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