The Shanghai Stock Exchange (SSE) released the “Q & A on Regulation on Listed Companies’ Information Disclosure” (the “Q & A” for short) on January 15, 2017 for listed companies’ reference in their information disclosure. It is a major measure of the SSE for both cementing the regulation and optimizing the regulatory service.
Since the SSE initiated the business of the direct channel for information disclosure in 2013, the SSE-listed companies’ sense of responsibility has continuously strengthened and the quality of their information disclosure has been enhanced gradually. However, with changes in the capital market, diversification of listed companies’ business types and higher requirements for information disclosure, the listed companies has higher difficulties in understanding and implementing the relevant rules. Especially, a lot of newly-listed companies can not fully understand the rules, which brings about a higher risk of violations.
While cementing the frontline regulation, the SSE also puts service into the regulation. According to its regulatory practice, it has sorted out the difficulties, questions, mistakes and risks that might encounter in listed companies’ information disclosure, and based on that, worked out the “Q & A” upon analyzing key points of rules, specifying regulatory standards, and answering questions of listed companies in advance. Thus, risk control has been advanced to lower the possibility of violations, that is, the regulatory service is optimized for listed companies’ standard information disclosure.
The “Q & A” released this time has 4 parts, involving the business types which are frequently used and with the most problems in listed companies’ routine information disclosure. Apart from business performance prediction, governmental subsidies, election of independent directors, the content related to compilation and submission of periodical reports has also been added in the “Q & A” considering that it is time to disclose the 2016 annual reports soon.
The SSE interprets the relevant rules based on the regulatory practice.
Although relevant laws and regulations, the “Stock Listing Rules” and other regulations have made clear requirements for information disclosure of listed companies and relevant obligators, flaws and even violations in information disclosure have still been seen in the regulation. Most are resulted from their incorrect understanding of rules and disclosure requirements. The “Q & A”, in light of previous regulatory cases, has sorted out the high risks in all kinds of business types. For the deviations in understanding of important rules and articles, the SSE has given clear explanations and eliminated misunderstandings. On the other hand, for various frequently asked questions about the rules’ application, such as the disclosure standard, time, methods and content and relevant decision-making procedures, the SSE has, according to different business types, highlighted the key points and requirements of the rules, specified the regulatory standards and effectively reminded of the relevant risks.
Practicability has been emphasized and the way of asking and answering interchangeably has been adopted.
The “Q & A” aims to help listed companies to solve problems in their information disclosure, and it covers the frequently used business types with the most problems in their routine information disclosure. Categorization and the way of asking and answering interchangeably have been adopted in compiling it, with practicability emphasized as well. Namely, in different business types, key problems and points are put forward in the way of questions so as to give explanations and raise attention. All this is to help listed companies to conveniently find their problems and get answers in a more direct and clear way as well as deal with risks through concentration of their resources, thus more effectively arranging their information disclosure and improving their disclosure quality and standard operation.
The compilation of the “Q & A” will never end. The SSE will periodically update, complement and release it according to revisions to the regulatory rules and in light of the new or common problems found in the regulatory practice. The “Q & A”, coming from the regulatory and information disclosure practice and attaching importance to convenience and hi-efficiency, will serve as an encyclopedia for listed companies’ routine information disclosure, which will boost the disclosure quality to a higher level by guiding them to compliantly and effectively disclosure information.
Attachment: Q & A on Regulation on Listed Companies’ Information Disclosure (Chinese Version Only)