<p>The Capital Markets Authority Law (&ldquo;CML&rdquo;) and its executive bylaws (the  &ldquo;Executive Bylaws&rdquo;) provide for different types of disclosure obligations in  connection with the activities of a licensed person under the CML (the &ldquo;Licensed  Person&rdquo;) or any of its dependents, affiliates or  employees.<br /><br /><strong>General</strong><br /><br />The obligation of &ldquo;disclosure&rdquo;  under the CML and the Executive Bylaws is not restricted to a particular  activity or mechanism. Such disclosure obligation has been set forth under the  Executive Bylaws with respect to disclosure of risks to the licensed person&rsquo;s  clients, disclosure of personal transactions of the employees of such licensed  person, and finally, disclosure of interests in a Licensed Person&rsquo;s equity  structure.<br /><br />Accordingly, we will highlight herein each type of disclosure  rules as set forth in the Executive Bylaws, each in accordance with the purposes  and intention of such rules.<br /><br /><strong>Disclosures Required Under Licensed  Person&rsquo;s Regulations<br /><br /></strong>Chapter Five (5) of the Executive Bylaws  generally discusses how a Licensed Person can secure a license to engage in  securities activities and what steps it must take to comply with the CML after  receiving said license.<br /><br />Within this context, the disclosure issues are as  follows:<br /><br />Article 164 of the Executive Bylaws provides for the first type  of disclosure by specifying that the Licensed Person shall sufficiently enable  its client to understand the nature of risks related to the type of transaction  the client will enter into.<br /><br />Article 197 of the Executive Bylaws provides  for the second type of disclosure and specifies that any employee affiliated to  a Licensed Person shall disclose to the Adherence and Compliance Executive  (which should be established within the structure of the Licensed Person in  compliance with the CML and the Executive Bylaws) about all the securities  transactions concluded, thereby through another Licensed Person.<br /><br />Further,  Article 198 of the Executive Bylaws provides that the Adherence and Compliance  Executive shall lay down proper measures for monitoring the personal  transactions of employees in securities in such a manner guaranteeing compliance  with the CML and the Executive Bylaws.<br /><br /><strong>Disclosure of Interests in  Listed Companies<br /><br /></strong>Chapter Ten (10) of the Executive Bylaws  discusses the obligations to disclose interests in any listed company, whether  directly or indirectly.<br /><br />Within this chapter, Articles 380 to 400 of the  Executive Bylaws provides for the third and last type of disclosure with respect  to disclosure of interest in the Licensed Person&rsquo;s equity structure.<br /><br />In  such respect, Article 380 provides that a beneficiary person shall mean each  person having an interest representing five percent (5%) and above from any of  the categories of voting shares in a company listed in the Exchange whether  directly, indirectly or in alliance with other persons (the &ldquo;Beneficiary  Person&rdquo;).<br /><br />The Executive Bylaws specifies that when calculating the total  number of shares, wherein a Beneficiary Person has an interest, it shall be  taken into consideration any share held or controlled by its spouse, minor  children, any company wherein it holds 30 % or more of the voting rights and any  shares held by other persons with whom such person agreed to obtain an interest  in the shares of the issuer.<br /><br />Accordingly, if the ownerships of the  aforementioned parties (i.e. family members specified above, affiliate or  associate companies to a listed company) collectively exceed (5%) or more, they  shall be treated on the basis that they represent the interest of a Beneficiary  Person under the CML and the Executive Bylaws, thus subject to its  provisions.<br /><br />Further, the Executive Bylaws provides other interests that  the Beneficiary Person should disclose:</p>
<ol>
<li>Agreeing with third parties to use the rights of vote resulting from holding  such percentage in favor of certain person(s).</li>
<li>Purchasing or agreeing to purchase the said percentage whether on credit  basis or by agreeing to buy the same in the future.</li>
<li>Person holding, whether directly or indirectly through portfolios managed by  third parties, a percentage of 30 % or more of the capital of any legal person  or there is an interest equivalent to such percentage if such person holds 5 %  or more of the capital of a shareholding company listed in the Exchange.</li>
<li>Person holding the said percentage for the account of third parties, whether  for the interest of one person, or several persons.</li>
</ol>
<p>Pursuant to the above, the Beneficiary Person shall notify the Capital Market  Authority (the &ldquo;Authority&rdquo;), the Exchange and the Issuer of such securities of  achieving the interest within a period of five days of achieving the same. Such  notification should occur within a period not exceeding five business days as of  the end of day of trading on which change reached such percentage.&nbsp;This  notification shall remain due when change causes to reduce the interest at five  percent of the capital.<br /><br />More importantly, any disposal of any of the  shares may not occur except after such disclosure and any interested person may  notify the Authority of such breach whenever such person has relevant  information indicating the failure of the Beneficiary Person to disclose its  interests under the legal provisions hereto.<br /><br /><strong>Form of  Disclosure</strong><br /><br />The disclosure of the interest shall be made  according to a template form set by the Authority for this purpose, which  include, as a minimum:</p>
<ol>
<li>Name of the Beneficiary Person, names of any other persons contributed to  achieving the interest.</li>
<li>Details about any financial support from another person for the process of  acquisition or financing loans.</li>
<li>Indicating the objective of acquisition whether to acquire the company,  invest therein or otherwise.</li>
<li>Total relevant shares with detail of what is held before disposition and  total number of shares it acquired after disposition and the percentage  representing the same from the company capital.</li>
<li>Nature of disposition and legal basis for disclosur</li>
</ol>
<p>Following the above, the Exchange wherein the security is listed shall  announce the information it received regarding the disclosures about the  interests upon receiving the information on the bulletin board of the market and  the market website and any other means coming up for announcing data in the  Securities Exchange. The Exchange shall notify the Authority of each disclosure  submitted thereto after verifying the accuracy of  data.<br /><br /><strong>Obligations for Disclosure</strong><br /><br />Further to the  above, each listed shareholding company shall keep a special register for the  disclosures of the board members and executive management containing all the  data and information required to be disclosed in accordance with the Executive  Bylaws. It shall also contain all the information related to remunerations,  salaries, incentives and other financial benefits and the same shall be included  in the reports of the general assembly. The concerned persons shall have the  right to review such register during the normal working hours.<br /><br />The  shareholding companies listed in the Exchange shall disclose the name of any of  their shareholders whose ownership reaches (5%) or more of the capital thereof  at any time and each change made to such percentage.<br /><br />To such effect, the  managing director, executive director, deputies thereof and the like shall  disclose to the Authority, the Exchange and the company upon assuming the  functions thereof about the following:</p>
<ol>
<li>Any interest for itself, its spouse and minor children in the securities of  the company where it works or any affiliate or associate company irrespective of  the percentage of such interest in proportion to the company capital.</li>
<li>Any change made to this interest and disclosure shall be made before any  disposition is made in the securities.</li>
<li>Exercising a right granted thereto by the company, any associate or  affiliated company for any subscription in the securities of the company, its  affiliate or associate companies.</li>
<li>Exercising a right granted thereto by any other company by subscription in  securities of such company.</li>
</ol>
<p>The disclosure referred to in the above paragraph shall be submitted within  five business days as of the date of disposition, provided that it shall include  the following:</p>
<ol>
<li>Name of company manager or any person connected therewith and degree of  acquaintance.</li>
<li>Reason for disclosure of disposition.</li>
<li>Quantity and nature of securities disclosed and their rate, if any.</li>
<li>Nature of disposition.</li>
<li>Date and place of disposition.</li>
</ol>
<p>Finally, it is to be noted that the Authority may obligate any person  connected with securities businesses to submit public or private disclosure and  provide any data connected with the business thereof. It shall, for carrying out  its functions and obligations, order that any investigation it deems necessary  be conducted in application of the CML and the Executive Bylaws. Failure to  comply with the aforementioned requirements may subject the concerned person  (whether the Beneficiary Person and/or the Licensed Person) to penalties and to  settle any damages caused to the Authority, Exchange or third parties as a  result of not disclosing its interests in accordance with the  aforementioned.</p>