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Information Disclosure Stressed for Stock Issuance
The China Securities Regulatory Commission (CSRC) issued two rules Thursday to enhance information disclosure transparency for stock issuance and public listing.
The rules, which took effect yesterday, ask companies planning to make initial public offerings (IPOs) in China to strictly follow the standards set by CSRC while drawing up its prospectus and related public announcement.
According to the CSRC regulation, risk factors should be specified and possible quantitative analysis provided in the company's prospectus, and "special risks" should be pointed out in particular when remarkable changes in the company's businesses are foreseeable.
Market risks, including insufficient market development and slack sales, declining market shares of the company's products, should also be made known to the public.
Operation risks, technical problems, corporate financial statements, as well as competition in the same industry, should also be included in the company's public announcement.
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