Lawlines Vol 10 Issue 1 - eOASIS - Rajah & Tann LLP

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Vol 10 Issue 1 June 2008 • Rajah & Tann LLP’s Bi-Annual Journal on articles of current interest, features, and legal developmentsIN THIS ISSUE:A Round-Up Of LatestDevelopments In TheFirst Half Of 2008Rajah & Tann LLP Hosts9 th Lunchtime SeminarSeriesTax, Private Wealth &Trusts PracticeCourt Of Appeal DeliversJudgment On The LTA-Komoco Motors DisputeInsider Trading And TheVexed QuestionOf General AvailabilityCourts And Arbitration -A Question Of Balance?Recent Developments InSingapore LawDisclosure OfConfidential InformationBy ProfessionalIn The Pursuit Of ItsLegitimate InterestsPublic PrivatePartnership Projects– The Processand 219(3) of the SFA). Philosophically, these prohibitions are aimed at ensuring that persons whoare not seized of the same material price sensitive information are not placed at a disadvantagewhen they trade with those who possess such information.When then, is information treated, for the purposes of our insider trading legislation, to be‘generally available’ and not just within the domain of a selected few? Since the coming into forceof Singapore’s new insider trading regime under the ‘SFA’ in 2002, there has been no litigationbrought, and hence no opportunity for judicial pronouncements to be made, on this question.This article considers two pertinent decisions of the New South Wales Criminal Court of Appeal onthis question and suggests that there are cogent and persuasive reasons for the Singapore Courtsto adopt the approach taken in Australia.By way of a quick overview, for an insider trading contravention to be made out, there must be(i) possession of information of a material price sensitive nature that is not generally available;(ii) knowledge that the information is not generally available and of a material price sensitivenature; and (iii) the carrying out of a prohibited act whilst in possession of such material pricesensitive information (ie dealing in the relevant securities, procuring another to deal in the relevantsecurities, or communication of the material price sensitive information to another) (see sections218 and 219 of the SFA).A comprehensive treatment of the prerequisites to make out an insider trading contravention underthe SFA is outside the scope of this article. This article looks only very briefly at when informationis regarded to be ‘generally available’, such that the operation of the insider trading prohibitionsunder the SFA is not triggered.Open Source In ITContracts40 /77
Vol 10 Issue 1 June 2008 • Rajah & Tann LLP’s Bi-Annual Journal on articles of current interest, features, and legal developmentsIN THIS ISSUE:A Round-Up Of LatestDevelopments In TheFirst Half Of 2008Rajah & Tann LLP Hosts9 th Lunchtime SeminarSeriesTax, Private Wealth &Trusts PracticeCourt Of Appeal DeliversJudgment On The LTA-Komoco Motors DisputeInsider Trading And TheVexed QuestionOf General AvailabilityCourts And Arbitration -A Question Of Balance?Recent Developments InSingapore LawDisclosure OfConfidential InformationBy ProfessionalIn The Pursuit Of ItsLegitimate InterestsPublic PrivatePartnership Projects– The ProcessOpen Source In ITContractsGeneral AvailabilityThe test of general availability is encapsulated in section 215 of the SFA. This section, like theAustralian provision from which it was derived, ie section 1002B of the Corporations Law,contemplates three alternative scenarios under which information is regarded to be generallyavailable, namely, where:• the information consists of readily observable matter;• the information has been made known in a manner that would or would be likely to bringit to the attention of persons who commonly invest in securities and a reasonable period fordissemination has elapsed since it was so made known; or• the information consists of deductions, conclusions or inferences made or drawn from either orboth of the information referred to in the preceding limbs.It is noteworthy that limb (b) is expressly stated in section 215 of the SFA as ‘without limiting thegenerality’ of the ‘readily observable’ limb (limb (a)).The Decision In R v FirnsThe first two limbs of the Australian equivalent of Section 215 of the SFA were considered in the2001 New South Wales Criminal Court of Appeal (‘Court’) decision of R v Firns [2001] NSWCCA191. In a 2-1 majority decision, it was held in Firns that if information is readily observable inan overseas jurisdiction, the general availability test under the first limb is satisfied and it is notnecessary for the information to be also readily observable in Australia. The dissenting judge,Carruthers AJ, was, however, of the view that the words ‘readily observable matter’ cannot be41 /77
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