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CSRC Publishes Guidelines for Classification of Listed Companies
Guidelines on Industry Classification of Listed Companies have lately been announced by China Securities Regulatory Commission (CSRC) to standardize industry classification of the listed companies.
According to person in charge of CSRC, it is very important for the listed companies to accurately disclose their industry information to the masses of shareholders.
Due to various reasons, CSRC failed to classify China's securities market at its initial stage. Shanghai stock exchange assorted its listed companies into four categories as: industry, commerce, public services and comprehensive businesses while Shenzhen stock exchange has one more category of finance.
In recent years, with the development of securities market and rapid increase of listed companies, the inadequate classification has brought great inconvenience for market to give adequate analysis of its listed companies. It is imperative for China's stock market to adopt a rational and scientific classification standard. The Guidelines were therefore formulated and announced.
In accordance with the Guidelines, stock exchanges will take operational turnover of the listed companies as classification criteria. Listed companies shall be assorted according to the consolidated report data audited by certified accountant firms. Without permission of the stock exchanges, listed companies are forbidden to make a change of their industry classification. But should great change occur in business scopes of the listed companies due to acquisitions or swaps, they can submit in a written application to the stock exchanges for a change of classification.
By PD Online staff member Li Yan
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