December 2, 2013
Securities and Exchange Surveillance Commission
The Securities and Exchange Surveillance Commission (“SESC”), today, made a recommendation to the Prime Minister and the Commissioner of the Financial Services Agency that an administrative monetary penalty payment order be issued in regard to an insider trading by MAM PTE. LTD. (“MAM”) pursuant to Article 20(1) of the Act for Establishment of the Financial Services Agency. This recommendation is based on the findings of the investigation into the insider trading, whereby the following violations of laws and ordinances were identified.
MAM is a private limited company incorporated under the Companies Act of the Republic of Singapore. MAM was empowered to manage the fund of a Cayman domiciled unit trust, Ubiquitous Master Series Trust Class G Fund, based on the discretionary investment management agreement which MAM had entered into with the trustee of the said fund.
On July 27, 2010, MAM, through X and Y who were in charge of the investment management of the said assets as fund manager, was tipped by an employee A of a securities company the material information that the executive decision-making body of Nippon Sheet Glass Co., Ltd. (“NSG”) made a decision to launch a follow-on public offering of its shares, which at first another employee B of the said securities company had learnt through the negotiation of the underwriting agreement and which later the said employee A had learnt in the course of his duties. Having been tipped as such, from July 27 to August 24, 2010, prior to the publication of the said material information on August 24, 2010, X and Y sold a the shares of NSG as the investment management based on the discretionary investment management agreement mentioned above. Accordingly, on the account of the said fund, MAM sold a total of 3,478,000 shares of NSG for 751,568,206 yen, and, among such sales, on the accounts of officers and/or employee of MAM (“Officers”), MAM through X and Y, traded in 7.47 percent and 6.22 percent thereof, which were equivalent to the contribution ratio of Officers to the fund as of July and August 2010 respectively.
It was concluded that the conduct of MAM mentioned above constituted “a person has conducted Sales and Purchase, etc. set forth in Article 166(1) in violation of the provisions of Article 166(1) or (3)” as stipulated under Article 175(1) of the Financial Instruments and Exchange Act (“FIEA”).
Pursuant to the FIEA, the amount of the administrative monetary penalty applicable to the above violation is 8,040,000 yen.
Details of the calculation are presented in the Attachment.
It had been reported to the SESC by the securities company mentioned in Section 2 above that this case was found in the course of its voluntary examination. The securities company has thereafter continued to cooperate with the SESC in its investigation.
Also, we acknowledge the assistance of the Monetary Authority of Singapore in this matter.
(1) Pursuant to Article 175(1)(i) of the FIEA, for the case of Sale on his/her account in violation of the provisions of Article 166(3), the amount of the administrative monetary penalty shall be calculated as follows:
(The price of the sales) × (Number of the shares sold)
- (The lowest price of shares during the two weeks after the publication of material information) × (Number of the shares sold)
In this case, the lowest price of NSG shares during the two-week period following the publication of the material information was 181 yen per share on August 27, 2010.
Also, in this case, pursuant to Article 175(1)(i) and (10)(ii) of the FIEA, and Article 1-23(2)(iii) of the Cabinet Office Ordinance on Administrative Monetary Penalty Provided for in Chapter VI-II of the FIEA, the amount of the administrative monetary penalty shall be calculated by deeming, out of the transactions which MAM conducted as investment management of the assets of the fund based on the discretionary investment management agreement, the contribution ratio of Officers of MAM to the fund (7.47 % as of July 2010 and 6.22 % as of August 2010 respectively) as MAM itself conducted sales on its own account.
Therefore, the amount of the administrative monetary penalty in this case shall be calculated as follows:
The amount concerning the sales during July 2010
(217,250,010 yen - 181 yen × 1,000,000 shares) × 7.47%
= 2,707,875 yen
The amount concerning the sales during August 2010
(534,318,196 yen - 181 yen × 2,478,000 shares) × 6.22%
= 5,336,772 yen
2,707,875 yen + 5,336,772 yen = 8,044,647 yen
(2) Pursuant to the provisions of Article 176(2) of the FIEA, the fraction less than ten thousand yen in the amount calculated (1) above shall be rounded down.
* Last Updated: December 16, 2013