The purpose of these regulations is to establish comprehensive management of internal information and appropriate disclosure to prevent insider trading by executives and employees, in accordance with the Capital Markets and Financial Investment Business Act (hereinafter referred to as the "Act") and other relevant laws and regulations.
Article 2 (Definition of Terms)
① In these regulations, "internal information" refers to information related to the company's management or financial status that could influence investors' investment decisions, including the disclosure obligations under Article 1 of the KOSDAQ Market Disclosure Rules (hereinafter referred to as "Disclosure Rules") of the Korea Exchange (hereinafter referred to as the "Exchange") and other matters affecting investment judgment. (Amended May 23, 2017)
② In these regulations, "disclosure officer" refers to a person designated under Article 2, Section 4 of the Disclosure Rules who is authorized to perform reporting duties on behalf of the company.
③ In these regulations, "executive" refers to directors (including those who fall under any of the categories specified in Article 401-2, Section 1 of the Commercial Act) and auditors.
④ For definitions of terms used in these regulations that are not covered by Sections 1 to 3, the definitions in related laws and regulations shall apply.
Article 3 (Scope of Application)
Matters related to disclosure, insider trading, and management of internal information shall be governed by these regulations, unless otherwise specified by relevant laws or the company's articles of incorporation.
Chapter 2: Management of Internal Information
Article 4 (Management of Internal Information)
① Executives and employees must strictly manage the internal information of the company that they come across during the course of their work, and must not disclose internal information within or outside the company, except when it is necessary for business purposes.
② The CEO must take necessary actions for managing internal information, including establishing specific standards for the storage, transmission, and destruction of internal information and related documents.
Article 5 (Disclosure Officer)
① The CEO must appoint a disclosure officer and promptly report the appointment to the exchange. The same applies when the disclosure officer is changed. (Amended 2017.5.23.)
② The disclosure officer is responsible for overseeing the establishment and operation of the internal information management system and shall perform the following tasks:
1.Execution of disclosures
2.Monitoring and evaluation of the internal information management system
3.Review of internal information and determination of whether disclosure is necessary
4.Providing training to executives and employees and taking other necessary actions for the operation of the internal information management system
5.Directing and supervising the departments or executives and employees responsible for managing internal information or handling disclosure tasks
6.Any other tasks deemed necessary by the CEO for the operation of the internal information management system
③ The disclosure officer shall have the following authority in performing their duties
1.The authority to request and review various documents and records related to internal information
2.The authority to hear opinions from executives and employees of departments responsible for accounting, auditing, or any department involved in generating internal information
④ The disclosure officer may, when necessary, consult with relevant executives regarding their duties and seek expert assistance at the company’s expense.
⑤ The disclosure officer must regularly report on the status of the internal information management system to the CEO (or the board of directors).
Article 6 (Disclosure Officer)
① The CEO must appoint a disclosure officer and promptly report the appointment to the exchange. The same applies when the disclosure officer is changed. (Amended 2017.5.23.)
② The disclosure officer shall be under the direction of the disclosure officer and perform the following duties related to internal information management:
1.Collecting and reviewing internal information and reporting to the disclosure officer
2.Performing necessary tasks for the execution of disclosures
3.Confirming changes in disclosure-related regulations and other matters necessary for managing internal information, and reporting to the disclosure officer
4.Any other matters deemed necessary by the CEO or the disclosure officer.
Article 7 (Centralization of Internal Information)
① Executives and heads of each department must promptly provide the disclosure officer with relevant information in the following cases:
1.When internal information arises or is expected to arise. (Amended 2017.5.23.)
2.When there is a reason to cancel or change previously disclosed information or when such a reason is expected to occur. (Amended 2017.5.23.)
3.In other cases where the disclosure officer requests information.
② The disclosure officer and the CEO shall efficiently establish an internal information transmission system to ensure the timely provision of internal information as required in paragraph 1. If necessary, the disclosure officer may be involved in the approval process related to disclosure obligations. (Newly established 2017.5.23.)
Article 7-2 (Management of Information Related to the Largest Shareholder)
The disclosure officer must ensure the smooth execution of disclosure obligations and request for clarification regarding information related to the largest shareholder. To do this, the disclosure officer must sufficiently explain the relevant facts to the largest shareholder and establish an information transmission system to receive the information in a timely manner. [Newly established 2017.5.23.]
Article 7-3 (Centralization of Internal Information from Subsidiaries)
① If internal information related to disclosure obligations arises or is expected to arise within a subsidiary, the subsidiary must immediately notify the company’s disclosure officer or the disclosure manager of the relevant content.
② To efficiently manage internal information related to disclosure obligations, the company must designate a person within the subsidiary responsible for managing disclosure-related information. If there are changes in this designation, the subsidiary must immediately notify the company’s disclosure officer or disclosure manager.
③ The company may request the subsidiary to submit relevant documents within the scope necessary for disclosure work.
Article 8 (External Disclosure of Internal Information)
① If an executive or employee must provide internal information to a company’s counterparties, external auditors, agents, or anyone with whom the company has legal or management consulting agreements, due to business reasons, they must report this matter to the disclosure officer.
② In such cases as mentioned in paragraph 1, the disclosure officer must take necessary actions, such as entering into a confidentiality agreement regarding the relevant internal information.
③ If the provision of internal information under paragraph 1 triggers an obligation for fair disclosure, the information must be disclosed without delay (excluding cases covered by exceptions in Article 15 of the Disclosure Regulations). [Newly established 2017.5.23.]
Chapter 3: Disclosure of Internal Information
Article 9 (Types of Disclosures)
The company's disclosures are categorized as follows:
1.Major management matters report and disclosure as per Article 1, Chapter 2, Section 1 of the Disclosure Regulations.
2.Query disclosures as per Article 1, Chapter 2, Section 2 of the Disclosure Regulations.
3.Fair disclosure as per Article 1, Chapter 2, Section 3 of the Disclosure Regulations.
4.Voluntary disclosures as per Article 1, Chapter 3 of the Disclosure Regulations.
5.Submission of securities reports and other documents as per Article 3, Chapter 1 of the Law.
6.Submission of business reports as per Articles 159, 160, and 165 of the Law, and Article 1, Chapter 2, Section 4 of the Disclosure Regulations.
7.Submission of major issues reports as per Article 161 of the Law.
Other disclosures as required by other regulations.
Article 9-2 (Confirmation of Disclosure Targets)
In determining whether a disclosure obligation, including fair disclosure, applies under these regulations, attention must be given to include matters that may have or may have a significant impact on stock prices or investment decisions, as per Article 6, Paragraph 1, Item 4 of the Disclosure Regulations. [This article was newly established on May 23, 2017.]
Article 10 (Execution of Disclosure)
① The disclosure officer must report the necessary content and relevant documents to the disclosure manager when a disclosure matter as defined in Article 9 arises.
② The disclosure manager must review whether the content and documents in the first paragraph comply with relevant laws and regulations. After this review, they must report to the CEO and proceed with the disclosure.
Article 10-2 (Prompt Execution of Disclosure)
The disclosure manager must make every effort to ensure that the internal information is disclosed in a timely manner, even before the disclosure deadline set by the disclosure regulations, whenever a disclosure matter as defined in Article 9 arises. [This article was newly established on May 23, 2017.]
Article 11 (Post-Disclosure Actions)
The disclosure manager and the disclosure officer must take corrective actions, such as issuing a corrected disclosure in accordance with Article 30 of the disclosure regulations, without delay if there is an error, omission, or the need to cancel or modify the disclosed information. (Amended on May 23, 2017.)
Article 12 (Media Inquiries, etc.)
① In principle, media inquiries about the company should be responded to by the CEO or the disclosure officer. If necessary, executives or employees from the relevant department may respond to the inquiry.
② If the company intends to distribute press releases to the media, it must consult with the disclosure officer. If necessary, the disclosure officer must report relevant matters regarding the distribution of press releases to the CEO.
③ If the content of the press release falls under the category of fair disclosure, the disclosure officer must ensure that it is disclosed before distribution. (New article added on May 23, 2017.)
④ If an executive or employee becomes aware that a media report is inaccurate, they must report it to the disclosure officer. The disclosure officer must report the matter to the CEO and take appropriate actions. (Moved from Article 3 on May 23, 2017.)
Article 12-2 (Verification of Media Coverage)
The disclosure officer, the disclosure manager, and the departments generating internal information must routinely monitor media coverage related to the company. If they find any discrepancies or inaccuracies, they must take corrective actions. (New article added on May 23, 2017.)
Article 13 (Corporate Briefings)
① The CEO must recognize that investor relations activities are an essential management responsibility for KOSDAQ-listed companies and should strive to voluntarily and continuously hold corporate briefings to build trust with investors.
② Corporate briefings regarding the company's management, business plans, and outlook must be held in consultation with the disclosure officer.
③ The disclosure officer or disclosure manager must announce the time, location, and content of the corporate briefing by the day before the event, and ensure that related materials are submitted to the exchange’s public disclosure system before the briefing is held.
④ All executives and employees of the company must be careful not to disclose any information that has not been previously announced, which may fall under fair disclosure during the corporate briefing. [Full revision on May 23, 2017.]
Article 13-2 (Rumors)
① The disclosure officer must verify whether rumors circulating in the market are true and whether they involve internal information, by consulting with the relevant business department.
② If the rumors are found to be related to a disclosure obligation under the disclosure regulations, the relevant information must be disclosed. [New article added on May 23, 2017.]
Article 13-3 (Requests for Information)
① When shareholders or stakeholders request information related to the company, the disclosure officer must review the legality of the request and decide whether to provide the information.
② The disclosure officer may consult with the legal department or external legal experts to assess whether the requested information could affect investors' investment decisions and stock prices before making a decision.
③ If information is provided according to the decision in Paragraph 1, Article 12, Paragraph 3 shall apply accordingly.
[New article added on May 23, 2017.]
Chapter 4: Regulations on Insider Trading, etc.
Article 14 (Return of Short-term Trading Profits)
① Executives and employees, as defined in Article 172, Paragraph 1 of the Act and Article 194 of the Enforcement Decree of the Act, who purchase certain securities (hereinafter referred to as "specific securities") and sell them within six months or sell specific securities and buy them within six months, and obtain a profit (hereinafter referred to as "short-term trading profit"), must return the profit to the company.
② If a shareholder of the company (including those holding securities other than shares, such as depositary receipts, etc.) requests the company to demand the return of short-term trading profits from a person who has earned such profits under Paragraph 1, the company must take the necessary actions within two months from the date the request is received.
③ If the Securities and Futures Commission notifies the company of the occurrence of short-term trading profits under Paragraph 1, the disclosure officer must immediately disclose the following information on the company’s website:
1.The position of the person who must return the short-term trading profit.
2.The amount of short-term trading profit.
3.The date the company received the notification from the Securities and Futures Commission regarding the occurrence of short-term trading profit.
4.The plan for claiming the return of short-term trading profit.
5.The fact that the company’s shareholders may require the company to demand the return of short-term trading profits, and if the company fails to make such a demand within two months from the date the request is received, shareholders may claim it on behalf of the company.
④ The period for the disclosure mentioned in Paragraph 3 shall be two years from the date the company receives the notification of short-term trading profits from the Securities and Futures Commission or until the date the short-term trading profits are returned, whichever comes first.
Article 15 (Notification of Transactions in Specific Securities)
Executives and employees, as defined in Article 172, Paragraph 1 of the Act and Article 194 of the Enforcement Decree of the Act, must notify the disclosure officer when they engage in transactions involving specific securities or any other related transactions.
Article 16 (Prohibition on Using Non-public Important Information)
Executives and employees are prohibited from using non-public important information (including non-public important information of affiliated companies) as defined in Article 174, Paragraph 1 of the Act, for the purchase or sale of specific securities or other transactions, or from allowing others to use such information for these purposes.
Chapter 4 Supplementary Provisions
Article 17 (Training)
① The disclosure officer and the disclosure staff must complete training related to disclosure duties as prescribed in Articles 36 and 44, Paragraph 5 of the disclosure regulations, and the disclosure officer must inform relevant executives and employees of the training content.
② The CEO must make sufficient efforts to provide training to executives and employees on matters related to Articles 14 to 16 and other legal provisions to prevent insider trading and other related activities. (Newly established 2017.5.23.)
Article 18 (Amendment or Abolition of Regulations)
The amendment or abolition of these regulations is carried out by the CEO. (Amended 2017.5.23.)
Article 19 (Publication of Regulations)
These regulations are published on the company's website. The same applies when the regulations are amended.
Supplementary Provisions
These regulations shall come into effect on June 13, 2017.
