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CHAPTER 8
UNFAIR SECURITIES TRADING PRACTICES AND THE ACQUISITION OF SECURITIES FOR BUSINESS
TAKE-OVERS
DIVISION 1 PREVENTION OF
UNFAIR SECURITIES TRADING PRACTICES
 SECTION
238.
- No securities company or any person responsible for the operation of a
securities company or company which issues securities or any person having an interest in
the securities shall impart any false statement or any other statement with the intention
to mislead any person concerning the facts relating to the financial condition, the
business operation or the trading prices of securities of a company or juristic person
whose securities are listed in the Securities Exchange or are traded in an
over-the-counter centre.
- SECTION
239.
- No securities company or any person responsible for the operation of a
securities company or company which issues securities or any person having an interest in
any securities shall disseminate news concerning any information which may cause any other
person to understand that the prices of any securities will increase or decrease, except
where the dissemination of information has already been reported to the Securities
Exchange.
- SECTION
240.
- No person shall disseminate any false news to be remoured which may cause
any other person to understand that the price of any securities will increase or decrease.
- SECTION
241.
- In the purchase or sale of securities which are listed in the Securities
Exchange or traded in an over-the-counter centre, no person, whether directly or
indirectly, shall purchase or sell, offer to purchase or sell or invite any other person
to purchase, sell or offer to purchase or sell securities which are listed in the
Securities Exchange or traded in an over-the-counter centre in such a way as to take
advantage of other persons by using information material to changes in the prices of
securities which has not yet been disclosed to the public and to which information he has
access by virtue of his office or position, and whether or not such act is done for his
own or another person's benefit, or to disclose such information so that he will receive
consideration from the person who engages in the aforesaid acts.
- For the purposes of this Section, the person under the first paragraph
shall include:
- director, manager, person responsible for the operation or auditor of a
company whose securities are listed in the Securities Exchange or traded in an
over-the-counter centre;
- securities holder of a company whose securities are listed in the
Securities Exchange or traded in an over-the-counter centre, who holds securities the par
value of which exceeds five percent of the registered capital. For the purpose of
calculation the value of such securities held by such person, the securities held by his
spouse and minor children shall be counted as his securities;
- state agency personnel, or director, manager, or officer of the
Securities Exchange or of an over-the-counter centre who is in an office or position with
access to information which is material to changes in the price of securities;
- any person involved in securities and/or the trading of securities in the
Securities Exchange or in an over-the-counter centre;
- SECTION
242.
- In order that the person referred to in the second paragraph of Section 241 shall not receive any benefit from the contravention of
the first paragraph of Section 241, the Office shall have the right
to call on such person to deliver the benefit which he has gained from such trading of
securities or from the disclosure of information within a six month period from the date
on which he gained access to such information. In this regard, such person shall deliver
the benefit as claimed by the Office within the time specified by the Office.
- The benefit claimable under the first paragraph shall be vested in the
Office.
- SECTION
243.
- In the purchase or sale of securities which are listed in the Securities
Exchange or traded in an over-the-counter centre:
- no person by colluding or agreeing with any other person shall purchase
or sell securities in concealment in order to mislead the general public to believe that
such securities are purchased or sold in great volume or the price of such securities has
changed or has not changed at any time or during any period of time which is not
consistent with the normal market conditions;
- no person, either by himself of jointly with any other person, shall
continuously trade securities which results in the purchase or sale of such securities
which is not consistent with the normal market conditions and such trading is made to lure
the general public to purchase or sell such securities unless such trading is made in good
faith to protect his rightful benefit.
- SECTION
244.
- The following cases shall also be deemed to be the concealment to mislead
the general public in accordance with Section 243(1):
- the purchase or sale of securities where the persons who finally receives
benefit from such purchase or sale is the same person;
- the order to purchase securities of the same category, type, and of the
same juristic person, or mutual fund project, with the knowledge that he himself or
jointly with any other person has ordered the sale or is going to order the sale, provided
that the order shall be inproximate amount, price and time;
- the order to sell securities of the same category, type, and of the same
juristic person or mutual fund project, with the knowledge that he himself or jointly with
any other person has ordered the purchase or is going to order the purchase, provided that
the order shall be in proximate amount, price and time.
 DIVISION 2 ACQUISITION OF SECURITIES FOR BUSINESS TAKE-OVERS
- SECTION
245.
- In this Division:
- "securities" means shares, or certificates representing the
rights to purchase shares or other securities which may be converted into shares.
- "business" means a company whose securities are listed in the
Securities Exchange or traded in an over-the-counter centre, or a public limited company.
- SECTION246.
- Where any person acquires or disposes of the securities of any business
and thereby increases or decreases the number of securities held by him or other persons
in such business to a number which aggregately reaches any multiple of five percent of the
total number of securities of such business sold, whether or not the transfer has been
registered and regardless of the amount of such increase or decrease, such person shall
report to the Office within the next business day each time such an acquisition or
disposition has been made, unless the disposition does not result in the change of
management or of the nature of business in accordance with the rules and procedures as
specified in the notification of the SEC.
- The report under the first paragraph shall be in accordance with the
rules and procedures as specified by the SEC.
- SECTION247.
- An offer to purchase or any other act which results in any person
acquiring or holding securities in a business up to twenty-five percent or more of the
total number of securities sold, shall be deemed to be an acquisition of securities for
the purpose of taking over a business, except for acquisition by inheritance.
- The acquisition of securities for the purpose of taking over a business
under the first paragraph shall comply with the rules, conditions and procedures specified
in the notification of the SEC. For this purpose, the SEC may require such person to make
a tender offer for the purchase of securities
- In cases where the SEC requires that there shall be a tender offer for
the purchase of securities under the second paragraph, such tender offer shall be filed
with the Office and shall become effective after the lapse of time specified in the
notification of the SEC.
- SECTION248.
- The person making a tender offer to purchase securities shall announce or
notify the offer to purchase securities in accordance with the rules and procedures
specified in the notification of the SEC.
- SECTION249.
- Upon the filing of the tender offer to purchase securities with the
Office, the person making the tender offer shall immediately deliver a copy of the tender
offer to the business from which he offers to purchase securities.
- SECTION250.
- Upon the receipt of a tender offer to purchase securities in accordance
with Section 249, such business shall prepare an opinion concerning
the tender offer in the form specified by the SEC and shall submit such opinion to the
Office and shall deliver a copy of such opinion to each shareholder within the time
specified in the notification of the SEC.
- SECTION251.
- No person making a tender offer to purchase securities shall purchase the
securities of the business prior to the effectiveness of the tender offer which has been
filed with the Office and prior to having complied with Section 248.
- From the effective date of the tender offer until the date after the time
specified in the tender offer for the purchase of securities, no person making the tender
offer shall purchase such securities by any means other than those specified in the tender
offer.
- SECTION252.
- After the expiry of the period specified in the tender offer to purchase
securities, if the amount of securities being offered for sale by the securities holders
is in excess of the amount of securities specified in the tender offer, the person making
the tender offer shall purchase all of such securities, only in the following cases:
- such securities are listed securities or traded in an over-the-counter
centre and the person making the tender offer has the intention to withdraw such
securities from being listed securities in the Securities Exchange or being traded in the
over-the-counter centre;
- the person making the tender offer has the intention to change the main
object of the business;
- the person making the tender offer has the intention to become the holder
of securities of that business in an amount of not less than seventy-five percent of the
total securities sold;
- other cases as specified in the notification of the SEC.
- The person making the tender offer shall make payment for securities to
the seller of securities immediately upon delivery of securities, and in case such
securities are listed securities, it shall be deemed to be a purchase and sale in the
Securities Exchange.
- SECTION253.
- In cases where the amount of securities being offered for sale by
securities holders at a certain price specified by the person making the tender offer is
less than the amount specified in the tender offer and the person making such tender offer
wishes to purchase up to the required amount, the person making such tender offer may
offer a higher price for the purchase of securities. In such case, the person making the
tender offer shall make an additional payment for the difference in price to the holders
of securities who have previously made the offer for sale.
- SECTION254.
- In cases where the person making the tender offer to purchase securities
for the purpose of taking over a business intends to withdraw such securities from being
listed securities or from being traded in an over-the-counter centre, the person making
such tender offer shall clearly state his intention in the tender offer.
- SECTION255.
- Regardless of whether the take over of a business has succeeded or not, a
person who has previously made a tender offer to purchase securities for the purpose of
taking over such business shall be able to make another tender offer for the purpose of
taking over the business only after a period of one year from the date after the time
specified in the previous tender offer for the purchase of securities, unless otherwise
permitted by the SEC.
- SECTION256.
- The person making the tender offer who has already purchased the
securities shall report the result of such purchase to the Office within the time
specified by the SEC.
- The report under the first paragraph shall be in accordance with the
rules and procedures as specified in the notification of the SEC.
- SECTION257.
- The Office shall keep the information concerning a tender offer to
purchase securities and make it available for inspection by the public for a period of one
year from the effective date of the tender offer.
- SECTION258.
- Securities of a business held by the following persons or partnerships
shall be regarded as securities held by the person referred to in Section
246 and Section 247:
- the spouse of such person;
- a minor child of such person;
- an ordinary partnership in which such person or the person under (1) or
(2) is a partner;
- a limited partnership in which such person or the person under (1) or (2)
is an unlimited liability partner or a limited liability partner who collectively holds
contribution in an amount exceeding thirty percent of the total contribution of the
limited partnership;
- a limited company or a public limited company in which such person or the
person under (1) or (2) or the partnership under (3) or (4) collectively holds shares in
an amount exceeding thirty percent of the total shares sold of that company; or
- a limited company or a public limited companies in which such person or
the person under (1) or (2) or the partnership under (3) or (4) or the company under (5)
collectively holds shares in an amount exceeding thirty percent of the total shares sold
of that company;
- a juristic person over which the persons under Section
246 and Section 247 have the power of management as
representatives.
- SECTION259.
- In cases where there is any doubt whether the holding of securities is of
the characteristics which may be counted as held by the same person in accordance with Section 258, the Office shall inform such person to give an
explanation or proceed to retify such holding of securities. If such person fails to give
an explanation or fails to rectify the situation within the time specified by the Office,
the holding of such securities shall be deemed to fall within the characteristics
specified in Section 258.
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