Internal Information Control Regulation

Chapter 1 General Provisions

Article 1 (Purpose)

  • The purpose of this regulation is to stipulate the comprehensive management and appropriate disclosure of company’s internal information to keep prompt and accurate posting and 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 laws and regulations.

Article 2 (Definition of Terms)

  • In this regulation, “inside information” refers to the posting obligations under Part 1 of the KOSDAQ market posting regulations (hereinafter referred to as the “posting regulations”) of the Korea Stock Exchange (hereinafter referred to as the “exchange”) and other matters related to the company’s management or status of assets, which may affect an investor's investment judgment.
  • “Person in charge of posting” in this regulation refers to a person who can perform reporting on behalf of the company in accordance with Article 2 (4) of the posting regulations.
  • In this regulation, the term “executive officer” refers to a director (including a person falling under any subparagraph of Article 401-2 (1) of the Commercial Act) and an auditor.
  • In addition to Paragraphs 1 through 3, the definition of terms used in this regulation shall be governed by the definitions of terms used in relevant laws and regulations.

Article 3 (Scope of Application)

  • Matters related to posting, insider trading, and inside information management are subject to these regulations, except as provided in the relevant laws and articles of incorporation.

Chapter 2 Management of Internal Information

Article 4 (Management of Inside Information)

  • Executives and employees shall strictly manage the company's internal information that they have come to know in the course of their work and shall not disclose internal information to the inside or outside the company, except when necessary for business.
  • The CEO shall take necessary measures for the management of internal information, such as setting specific standards for the storage, delivery, and destruction of internal information and related documents.
  • In case of a company with an executive officer, 'CEO' should be changed to 'CEO'.

Article 5 (Person in Charge of Posting)

  • The CEO shall designate a person in charge of posting and report it to the exchange without delay. The same shall apply when the person in charge of posting is changed.
  • The posting manager oversees the work related to the establishment and operation of the internal information management system and performs the following tasks.
    • Execution of posting
    • Inspection and evaluation of the operating status of the internal information management system
    • Review of inside information and decision on whether to post it
    • Measures necessary for the operation of the internal information management system, such as education for executives and employees
    • Command and supervise for the department, executives, or employees in charge of public posting or management of internal information
    • Other tasks recognized by the CEO as necessary for the operation of the internal information management system
  • The person in charge of posting has the following authority in performing his/her duties.
    • The right to request the submission of various documents and records related to internal information and to view them
    • The right to hear necessary opinions from executives and employees of the department in charge of accounting or auditing, and other tasks related to the generation of internal information
  • The person in charge of posting may, if necessary, consult with the executives in charge of related duties in performing his/her duties, and may seek the assistance of experts at the company's expense.
  • The person in charge of posting shall report the operation status of the internal information management system to the CEO (or to the board of directors) on a regular basis.

Article 6 (Posting Officer)

  • The CEO shall designate a posting officer and report it to the exchange without delay. The same shall also apply when the posting officer is changed.
  • The posting officer shall be under the direction of the person in charge of posting in relation to internal information management and perform the following tasks.
    • Collection and review of inside information and reporting to the person in charge of posting
    • Tasks necessary for the enforcement of public posting
    • Confirmation of matters necessary for the management of internal information, such as changes in posting-related laws, and reporting to the person in charge of posting
    • Other matters deemed necessary by the CEO or the person in charge of posting

Article 7 (Concentration of Inside Information)

  • Executives and the head of each department shall provide information to the person in charge of posting in a timely manner in any of the following cases
    • When internal information occurs or is expected to occur
    • When there is a reason or is expected to cancel or change the previously posted information among internal information
    • In other cases where there is a request from the person in charge of posting
  • The person in charge of posting and the CEO shall efficiently establish an information delivery system within the company for the timely provision of internal information pursuant to Paragraph 1, and, if necessary, the CEO can receive cooperation from the person in charge of posting in the approval process for duties related to posting obligations.
  • In the case of a controlling company, the following provisions are added.

Article 7-2 (Concentration on Internal Information of Subsidiaries)

  • Where internal information related to the disclosure obligations occurs or is expected to occur to a subsidiary, the Company shall cause the subsidiary to promptly notify the Disclosure Officer or the Disclosure Manager of the Company of the content.
  • In order to efficiently manage internal information related to disclosure obligations under Paragraph (1) hereof, the Company shall have a person who manages disclosure-related information in a subsidiary and immediately notify the Disclosure Officer or the Disclosure Manager of the Company of designating or changing the person.
  • The Company may ask a subsidiary to submit relevant data to the extent necessary for the disclosure.
  • In the case of a controlling company, the following provisions are added.

Article 7-3(Concentration on Internal Information of Affiliated Companies)

  • Where internal information related to the disclosure obligations occurs or is expected to occur to a affiliated company, the Company shall cause the affiliated company to promptly notify the Disclosure Officer or the Disclosure Manager of the Company of the content.
  • In order to efficiently manage internal information related to disclosure obligations under Paragraph (1) hereof, the Company shall have a person who manages disclosure-related information in a affiliated company and immediately notify the Disclosure Officer or the Disclosure Manager of the Company of designating or changing the person.
  • The Company may ask a affiliated company to submit relevant data to the extent necessary for the disclosure.

Article 8 (External Provision of Internal Information)

  • If any of the officers, directors, and employees unavoidably provide internal information against the Company's counterparty, external auditors and agents, and those who have executed the advisory contracts and have consulted with the Company for legal advice and management consulting, the person shall report the relevant matters to the Disclosure Officer.
  • In the case of Paragraph (1) hereof, the Disclosure Officer shall take necessary measures, such as entering into a contract of confidentiality of relevant internal information.
  • Upon providing internal information pursuant to Paragraph (1) hereof, if a fair disclosure obligation arises, it shall be disclosed without delay (except in cases falling under the application of Article 15 of the Disclosure Regulation).

Chapter 3 Posting of Inside Information

Article 9 (Types of Disclosure)

The disclosure of the Company shall be classified as follows:
  • Reporting and disclosure of major management matters pursuant to Section 1, Chapter 2, Part 1 of the Disclosure Regulation
  • Inquiry disclosure pursuant to Section 2, Chapter 2, Part 1 of the Disclosure Regulation
  • Fair disclosure pursuant to Section 3, Chapter 2, Part 1 of the Disclosure Regulation
  • Autonomous disclosure pursuant to Chapter 3, Part 1 of the Disclosure Regulation
  • Submission of the securities declaration form, etc. under Chapter 1, Part 3 of the Act
  • Submission of business reports, etc. pursuant to Articles 159, 160 and 165 of the Act and Section 4, Chapter 2, Part 1 of the Disclosure Regulation
  • Submission of a report on major matters under Article 161 of the Act
  • Disclosure in accordance with other regulations

Article 9-2 (Confirmation of Disclosure Subject)

  • Upon determining whether the disclosure obligations, including fair disclosure, are subject to this provision, even the matters that significantly affect, or may affect, the stock price or investment judgment under Subparagraph 4 of Article 6(1) of the Disclosure Regulation shall be included.

Article 10 (Execution of Disclosure)

  • The Disclosure Manager shall prepare the necessary contents if a disclosure as specified in Article 9 occurs, and report to the Disclosure Manager in case of required documents.
  • The disclosure manager shall review whether the contents of Paragraph (1) and relevant documents are not in violation of the relevant laws and regulations and report them to the representative director before making the disclosure.

Article 10-2 (Prompt Implementation of Disclosure)

  • Upon any occurrence of the disclosure matter under Article 9, the Disclosure Officer shall make every effort to ensure that the relevant internal information is disclosed in a timely manner, even before the time of disclosure under the Disclosure Regulation.

Article 11 (Post Measure After Disclosure)

  • Where there is any omission or error in the disclosed matter, or it is intended to be canceled or changed, the Disclosure Officer and the Disclosure Manager shall take measures to rectify the disclosure, such as a correction or disclosure in accordance with Article 30 of the Disclosure Regulation, without delay.

Article 12 (Media Coverage, Etc.)

  • At a request for coverage regarding the Company from the media, etc., the representative director or the Disclosure Officer shall respond to it. If necessary, directors, officers, and employees of the relevant divisions may be allowed to have an interview.
  • Regarding distributing press releases to the media, etc., the Company shall discuss it with the Disclosure Officer. The Disclosure Officer shall, if necessary, report the matters concerning the distribution of press releases to the representative director.
  • If the contents of the press release are subject to fair disclosure, the Disclosure Officer shall disclose the contents of the press release distributed under Paragraph (2) hereof before the distribution of the press release.
  • Any of the directors, officers, and employees who have found that the released content to the media is different from the facts shall report it to the Disclosure Officer.
  • The Disclosure Officer shall report the relevant matters to the representative director and take necessary measures.

Article 12-2 (Confirmation of Reported Contents)

  • The Disclosure Officer, Disclosure Manager, and division where internal information has occurred, if the contents of the press release are subject to fair disclosure, shall ordinarily check the contents of the Company-related reports from the media on a regular basis and take measures to correct any matters that are different from the facts.

Article 13 (Investor Relations Session)

  • The representative director shall recognize that IR activities are the management responsibilities of KOSDAQ-listed companies and shall endeavor to establish trust with investors by holding an IR session on a voluntary and continuous basis.
  • The IR session for a business plan, prospect, etc. shall be held through the approval of the Disclosure Officer. The Disclosure Officer shall, if necessary, report the matters related to holding the IR session to the representative director.
  • The Disclosure Officer or the Disclosure Manager shall disclose the date, place, and contents of the IR session until the day before holding the session, and shall post relevant data to the disclosure submission system of the ERX before holding the IR session.
  • All officers, directors, and employees of the Company shall be careful not to disclose any information not disclosed in advance in the information subject to fair disclosure during the IR session.

Article 13-2 (Rumors)

  • If a rumor has been spread in the market, the Disclosure Officer shall check whether the rumor is true and whether it corresponds to internal information through an inquiry on related business divisions.
  • As a result of the verification under Paragraph (1) hereof, if the relevant rumor falls under the disclosure obligations under the Disclosure Regulation, the relevant information shall be disclosed

Article 13-3 (Request for Providing Information)

  • In the event that shareholders, stakeholders, etc. request the disclosure of information related to the Company, the Disclosure Officer shall review the legality of the request to decide whether to provide the relevant information.
  • The Disclosure Officer may listen to the opinion of the legal division or an external legal expert regarding whether the information requested to be provided may affect the investor's investment judgment and stock price to determine whether to provide such information.
  • Article 12 (3) shall apply mutatis mutandis to the case of providing information in accordance with the decision under Paragraph (1) hereof.

Chapter 4 Regulations on Insider Trading, Etc.

Article 15 (Return of short-term trading profits)

  • If an officer, a director, or an employee as designated by Article 172(1) of the Act and Article 194 of the Enforcement Decree of the Act purchased certain securities, etc. (hereinafter referred to as "specific securities", etc.) under Article 172(1) of the Act and then has gained the profits within 6 months by selling them, or sold specific securities and has gained the profits within 6 months by purchasing them, the profits (the “gains on short-term trading”) shall be returned to the Company.
  • Where a shareholder of the Company (including a person who owns equity securities or depository securities other than the shareholder, which are the same in this Article) causes the Company to request the person who has obtained the gains on short-term trading under Paragraph (1) hereof to return the gains on short-term trading, the Company shall take measures required within 2 months from the day of being requested.
  • If the Securities and Futures Commission notifies the Company of the occurrence of the gains on short-term trading under Paragraph (1) hereof, the Disclosure Officer shall promptly disclose the following matters on the Company's website:
    • Status of the person who is required to return the gains from short-term trading
    • Amount of gains from short-term trading
    • The day on which the Securities and Futures Commission makes a notification about the occurrence of gains from the short-term trading
    • Plan for claiming to return gains from short-term trading
    • The shareholder of the Company may request the Company to claim the return of the gains from short-term trading against the person who has obtained the short-term gains, and if the Company fails to make a claim within 2 months of the day of being requested, the shareholder may make a claim by subrogating the Company
    • (代位)하여 청구를 할 수 있다는 뜻
  • The disclosure period under Paragraph (3) hereof shall be from the date on which the occurrence of the gains on short-term trading has been reported by the Securities and Futures Commission to the two-year period from the date of notification or the date on which the gains on short-term trading are returned, whichever comes earlier.

Article 15 (Notification of the Sale, etc. of Specific Securities, etc.)

  • An officer, a director, or an employee as designated by Article 172(1) of the Act and Article 194 of the Enforcement Decree of the Act shall notify the Disclosure Officer in the case of trading or other transactions of specific securities, etc.

Article 16 (Prohibition of the Use of Non-Disclosed Material Information)

  • The officers, directors, and employees shall not use, or cause others to use, non-disclosed material information (including non-disclosed material information of affiliates) as specified in Article 174 (1) of the Act for the trading or other transactions of specific securities, etc.

Chapter 5 Supplementary Provisions

Article 17 (Training)

  • The Disclosure Officer and the Disclosure Manager shall complete the training on disclosure work pursuant to Articles 36 and 44(5) of the Disclosure Regulation, and the Disclosure Officer shall disseminate the training contents to the relevant officers, directors and employees.
  • The representative director shall make a sufficient effort to conduct the training of the officers, directors, and employees to prevent the matters specified in Articles 14 to 16 and other insider trading prescribed by laws.

Article 18 (Opening and Closing of Regulations)

  • The amendment or abolition of these Regulations shall be made by the representative director.

Article 19 (Promulgation of Regulations)

  • These Regulations shall be promulgated on the Company's website. The same shall apply when the Regulations are amended.

Addendum

Article 1 (Enforcement Date)

  • These Regulations shall take effect from July 3, 2017.