Internal Information Management Regulations

 

Chapter 1 General Provisions

Article 1 (Purpose) The purpose of these regulations is to prescribe matters concerning the comprehensive management and appropriate disclosure of the company's internal information, in order to ensure prompt and accurate disclosure and to prevent insider trading by officers and employees, in accordance with the "Financial Investment Services and Capital Markets Act" (hereinafter referred to as the "Act") and related laws and regulations.

 

Article 2 (Definition of Terms) ① In these regulations, the term "internal information" means matters subject to disclosure obligations under Part 1 of the KOSDAQ Market Disclosure Regulations (hereinafter referred to as the "Disclosure Regulations") of the Korea Exchange (hereinafter referred to as the "Exchange"), as well as other matters concerning the management or financial condition of the company that may affect investors' investment decisions. (Amended on June 1, 2017) ② In these regulations, the term "disclosure officer" means a person who may perform reporting duties on behalf of the company pursuant to Article 2, Paragraph 4 of the Disclosure Regulations. ③ In these regulations, the term "officer" means a director (including any person falling under any of the subparagraphs of Article 401-2, Paragraph 1 of the "Commercial Act") and an auditor. ④ Except as provided in Paragraphs 1 through 3, the definitions of terms used in these regulations shall be governed by the definitions of terms used in the relevant laws and regulations.

 

Article 3 (Scope of Application) Matters concerning disclosure, insider trading, and internal information management shall be governed by these regulations, except as otherwise prescribed by the relevant laws and regulations or the articles of incorporation.

 

 

Chapter 2 Management of Internal Information

Article 4 (Management of Internal Information) ① Officers and employees shall strictly manage the company's internal information that they become aware of in the course of their duties, and shall not disclose internal information inside or outside the company except where necessary for business purposes. ② The representative director shall take the measures necessary for the management of internal information, including establishing specific standards concerning the storage, transmission, and destruction of internal information and related documents.

 

Article 5 (Disclosure Officer) ① The representative director shall designate a disclosure officer and report this to the Exchange without delay. The same shall apply when the disclosure officer is changed. (Amended on June 1, 2017) ② The disclosure officer shall oversee the duties related to the establishment and operation of the internal information management system and shall perform the following duties:

1. Execution of disclosures

2. Inspection and evaluation of the operational status of the internal information management system

3. Review of internal information and determination of whether to disclose

4. Measures necessary for the operation of the internal information management system, such as providing training to officers and employees

5. Direction and supervision of the department or the officers and employees in charge of managing internal information or handling disclosure duties

6. Other duties recognized by the representative director as necessary for the operation of the internal information management system

③ The disclosure officer shall have the following authorities in performing their duties:

1. The authority to request the submission of, and to inspect, various documents and records related to internal information

2. The authority to hear necessary opinions from the officers and employees of the department in charge of accounting or auditing duties, or of other departments in charge of duties related to the generation of internal information

④ In performing their duties, the disclosure officer may consult with the officer in charge of the relevant duties where necessary, and may seek the assistance of experts at the company's expense. ⑤ The disclosure officer shall periodically report the operational status of the internal information management system to the representative director (or the board of directors).

 

Article 6 (Disclosure Staff) ① The representative director shall designate disclosure staff and report this to the Exchange without delay. The same shall apply when the disclosure staff is changed. (Amended on June 1, 2017) ② The disclosure staff shall be under the direction of the disclosure officer with respect to the management of internal information, and shall perform the following duties:

1. Collection and review of internal information and reporting to the disclosure officer

2. Duties necessary for the execution of disclosures

3. Confirmation of matters necessary for the management of internal information, such as changes to disclosure-related laws and regulations, and reporting to the disclosure officer

4. Other matters recognized as necessary by the representative director or the disclosure officer

 

Article 7 (Centralization of Internal Information) ① Officers and the head of each department shall provide the disclosure officer with information in a timely manner in any of the following cases: (Amended on June 1, 2017)

1. Where internal information arises or is expected to arise (Amended on June 1, 2017)

2. Where grounds arise, or are expected to arise, to cancel or change previously disclosed matters among internal information (Amended on June 1, 2017)

3. Other cases where the disclosure officer so requests

② The disclosure officer and the representative director shall efficiently establish an information transmission system within the company for the timely provision of internal information under Paragraph 1, and may, where necessary, arrange for the approval process of duties related to disclosure obligations to require the cooperation of the disclosure officer. (Newly established on June 1, 2017)

 

Article 7-2 (Management of Information Related to the Largest Shareholder) In order to smoothly perform disclosure duties concerning disclosure obligations and inquiry disclosure requests related to the largest shareholder, the disclosure officer shall fully explain the relevant facts to the largest shareholder and establish an information transmission system so that the relevant information can be received in a timely manner. [This Article newly established on June 1, 2017]

 

Article 8 (Provision of Internal Information Outside the Company) ① Where an officer or employee must unavoidably provide internal information for business reasons to the company's counterparties, external auditors, agents, or persons who have entered into advisory contracts with the company such as for legal or management advice, they shall report the relevant matters to the disclosure officer. ② In the case of Paragraph 1, the disclosure officer shall take the necessary measures, such as entering into a confidentiality agreement concerning the relevant internal information. ③ Where a fair disclosure obligation arises in providing internal information pursuant to Paragraph 1, it shall be disclosed without delay (except in cases falling under the exceptions to the application of Article 15 of the Disclosure Regulations). (Newly established on June 1, 2017)

 

 

Chapter 3 Disclosure of Internal Information

 

Article 9 (Types of Disclosure) The company's disclosures are classified as follows:

1. Reporting and disclosure of material management matters pursuant to Part 1, Chapter 2, Section 1 of the Disclosure Regulations

2. Inquiry disclosure pursuant to Part 1, Chapter 2, Section 2 of the Disclosure Regulations

3. Fair disclosure pursuant to Part 1, Chapter 2, Section 3 of the Disclosure Regulations

4. Voluntary disclosure pursuant to Part 1, Chapter 3 of the Disclosure Regulations

5. Submission of securities registration statements, etc. pursuant to Part 3, Chapter 1 of the Act

6. Submission of business reports, etc. pursuant to Articles 159, 160, and 165 of the Act and Part 1, Chapter 2, Section 4 of the Disclosure Regulations

7. Submission of material fact reports pursuant to Article 161 of the Act

8. Other disclosures pursuant to other laws and regulations

 

Article 9-2 (Confirmation of Matters Subject to Disclosure) In determining whether a matter is subject to disclosure obligations, including fair disclosure, pursuant to these regulations, care shall be taken to also include matters that have or may have a material effect on the stock price or investment decisions under Article 6, Paragraph 1, Subparagraph 4 of the Disclosure Regulations. [This Article newly established on June 1, 2017]

 

Article 10 (Implementation of Disclosure) ① Where a matter subject to disclosure prescribed in Article 9 arises, the disclosure staff shall prepare the necessary content and the required documents, and report them to the disclosure officer. ② The disclosure officer shall review whether the content and documents under Paragraph 1 violate the relevant laws and regulations, report them to the representative director, and then make the disclosure.

 

Article 10-2 (Prompt Implementation of Disclosure) Where a matter subject to disclosure under Article 9 arises, the disclosure officer shall make every effort to ensure that the relevant internal information is disclosed in a timely manner, even before the disclosure deadline under the Disclosure Regulations. [This Article newly established on June 1, 2017]

 

Article 11 (Follow-up Measures After Disclosure) Where there is an error or omission in disclosed content, or where cancellation or change is desired, the disclosure officer and disclosure staff shall take measures to correct it without delay, such as making a corrective disclosure pursuant to Article 30 of the Disclosure Regulations. (Amended on June 1, 2017)

 

Article 12 (Coverage by the Press, etc.) ① Where there is a request for coverage of the company from the press, etc., in principle the representative director or the disclosure officer shall respond. Where necessary, the officers and employees of the relevant department may be permitted to respond to the coverage. ② Where the company intends to distribute a press release to the press, etc., it shall consult with the disclosure officer. The disclosure officer shall, where necessary, report matters related to the distribution of the press release to the representative director. ③ Where the content of a press release distributed pursuant to Paragraph 2 falls within the scope of fair disclosure, the disclosure officer shall disclose it before the press release is distributed. (Newly established on June 1, 2017) ④ An officer or employee who becomes aware that press coverage differs from the facts shall report this to the disclosure officer. The disclosure officer shall report the relevant matters to the representative director and take the necessary measures. (Relocated from Paragraph 3 on June 1, 2017)

 

Article 12-2 (Confirmation of Reported Content) The disclosure officer, disclosure staff, and the department in which internal information arises shall routinely check the content of press coverage related to the company, and where there is content that differs from the facts, take measures to correct it. [This Article newly established on June 1, 2017]

 

Article 13 (Investor Relations Briefings) ① The representative director shall recognize that IR activities are a management responsibility of a KOSDAQ-listed corporation, and shall strive to voluntarily and continuously hold investor relations briefings to build trust with investment-related parties. ② Investor relations briefings concerning the company's management content, business plans, and prospects shall be held in consultation with the disclosure officer. ③ The disclosure officer or disclosure staff shall disclose the date, place, and content of the investor relations briefing by the day before it is held, and shall post the related materials on the Exchange's disclosure submission system before the briefing is held. ④ All officers and employees of the company shall take care to ensure that, among the information subject to fair disclosure, matters that have not been disclosed in advance are not disclosed during the investor relations briefing. [Wholly amended on June 1, 2017]

 

Article 13-2 (Rumors) ① Where a rumor has been spread in the market, the disclosure officer shall confirm whether the content of the rumor is true and whether it constitutes internal information, through means such as consulting the opinion of the relevant business department. ② Where, as a result of the confirmation under Paragraph 1, the rumor constitutes a matter subject to disclosure obligations under the Disclosure Regulations, the relevant information shall be disclosed. [This Article newly established on June 1, 2017]

 

Article 13-3 (Requests for the Provision of Information) ① Where a request for the disclosure of information related to the company is received from a shareholder, interested party, or others, the disclosure officer shall review the legitimacy of the request and determine whether to provide the relevant information. ② In order to determine whether to provide the information, the disclosure officer may hear the opinion of the legal affairs department or an external legal expert as to whether the information requested may affect investors' investment decisions and the stock price. ③ Where information is provided pursuant to the determination under Paragraph 1, Article 12, Paragraph 3 shall apply mutatis mutandis. [This Article newly established on June 1, 2017]

 

 

Chapter 4 Regulation of Insider Trading, etc.

 

Article 14 (Return of Short-Swing Profits) ① Where an officer or an employee prescribed by Article 172, Paragraph 1 of the Act and Article 194 of the Enforcement Decree of the Act gains a profit by selling specified securities, etc. under Article 172, Paragraph 1 of the Act (hereinafter referred to as "specified securities, etc.") within six months after purchasing them, or by purchasing them within six months after selling them, they shall return that profit (hereinafter referred to as "short-swing profit") to the company. ② Where a shareholder of the company (including a person who owns equity securities other than stock certificates or securities depositary receipts; hereinafter the same shall apply in this Article) requests the company to claim the return of short-swing profit under Paragraph 1 from the person who gained it, the company shall take the necessary measures within two months from the date of receiving the request. ③ Where the Securities and Futures Commission notifies the company of the occurrence of a short-swing profit under Paragraph 1, the disclosure officer shall disclose the following matters on the company's internet website without delay:

1. The position of the person who must return the short-swing profit

2. The amount of the short-swing profit

3. The date on which the occurrence of the short-swing profit was notified by the Securities and Futures Commission

4. The plan to claim the return of the short-swing profit

5. The fact that a shareholder of the company may request the company to claim the return of the short-swing profit from the person who gained it, and that if the company does not make such a claim within two months from the date of receiving the request, the shareholder may make the claim by subrogation on behalf of the company

④ The disclosure period under Paragraph 3 shall be until the earlier of two years from the date on which the occurrence of the short-swing profit was notified by the Securities and Futures Commission, or the date on which the short-swing profit is returned.

 

Article 15 (Notification of Trading, etc. of Specified Securities, etc.) Where an officer or an employee prescribed by Article 172, Paragraph 1 of the Act and Article 194 of the Enforcement Decree of the Act engages in trading or other transactions of specified securities, etc., they shall notify the disclosure officer of that fact.

 

Article 16 (Prohibition of Use of Undisclosed Material Information) Officers and employees shall not use undisclosed material information prescribed by Article 174, Paragraph 1 of the Act (including undisclosed material information of affiliated companies) in trading or other transactions of specified securities, etc., nor allow others to use it.

 

 

Chapter 5 Supplementary Provisions

 

Article 17 (Training) ① The disclosure officer and disclosure staff shall complete training on disclosure duties pursuant to Article 36 and Article 44, Paragraph 5 of the Disclosure Regulations, and the disclosure officer shall inform the relevant officers and employees of the content of the training. ② The representative director shall make sufficient efforts, such as providing training to officers and employees to prevent insider trading as prescribed in Articles 14 through 16 and other matters prescribed by the Act. (Newly established on June 1, 2017)

 

Article 18 (Amendment and Repeal of Regulations) The amendment or repeal of these regulations shall be made by the representative director. (Amended on June 1, 2017)

 

Article 19 (Publication of Regulations) These regulations shall be published on the company's website. The same shall apply when the regulations are amended.

 

 

Supplementary Provisions
These regulations shall take effect from September 1, 2009.

Supplementary Provisions
These regulations shall take effect from June 1, 2017.