In Taiwan's stock market, the main regulation on secondary distributions is Article 22-2 of the Securities Exchange Act, which, according to legislative history, was based on U.S. law adaptation. The aim of the law is to prevent issuers and their insiders from evading primary market regulations. However, we found out that the current law regarding this is flawed. Because the original purpose of secondary distribution regulation was improperly identified, the consequence is that the regulation on insiders' disposition of shares is both over-inclusive and under-inclusive. This paper is an overall survey of Taiwan's secondary distribution system, also using comparative analysis of U.S. law. I suggest that the securities authorities amend Securities Exchange Law and regulations to solve the issues raised in this paper.