Revised rules to require prior disclosure of insider transactions

Local businesses will be required to disclose any major insider trading before the proposed transaction takes place, the financial regulator said Tuesday. The Cabinet approved a revised enforcement ordinance to the financial investment services and capital markets act to this end, according to the Financial Services Commission. The changed rules will be implemented on July 24. Currently, firms are only required to disclose insider transactions within five days after such transactions occur. Under the revised rules, they will be required to disclose any insider trading involving more than 5 billion won (US$3.6 million) or 1 percent of their issued stocks at least 30 days in advance. Failures to do so, as well as failures to carry out proposed transactions or filing false reports, may be subject to a maximum fine of 2 billion won under the revised regulations, the financial regulator said in a press release. "The advance disclosure rule for insider trading is expected to help prevent unfair trading and p rotect investors by promoting transparency in stock trading once it is implemented on July 24," it added. The revised ordinance also specifies entities excluded from advance disclosure requirements, such as institutional investors, who "have relatively high inside control" and "are viewed to have little possibility of abusing insider information," the FSC said. Source: Yonhap News Agency