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To guide the listed companies on the Shanghai securities market for a sound management system of information disclosure and improve their management level and quality of information disclosure, the Shanghai Stock Exchange (SSE) has issued the "Guidelines for Management System of SSE Listed Companies' Information Disclosure", effective as of today. According to the "Guidelines", all listed companies should, in light of their own situation, modify or finalize and report the management system of information disclosure before June 30, 2007.
The "Guidelines", with four chapters and 27 articles, includes how to establish, implement and supervise the management system of information disclosure as well as the details of the system. According to the "Guidelines", listed companies should build their management departments of information disclosure as their permanent establishment. The department will work out the management system of information disclosure. After that, the company's directorate should be responsible for the system's implementation, charged either by its Chairman of Directorate or General Manager and coordinated by its Secretary to Directorate.
The "Guidelines" points out that the management system of information disclosure is applied not only to the management department of information disclosure and the persons in charge, the directors and the directorate, the supervisors and the board of supervisors, the senior management and the secretaries to directorate, but also to officials from the company's headquarters' departments or from other branches and subsidiaries, the company's controlling shareholders or major shareholders holding more than 5% of its shares, and other departments and personnel in charge of information disclosure. The company should modify or finalize the management system of information disclosure before submitting it, in due time, to the directorate for discussion. Within 5 working days after approval upon discussion, the company should report the system to the SSE and the securities regulatory bureau where it was registered for putting on records. Besides, it should disclose the system on the SSE website.
Meanwhile, the "Guidelines" also requires that the directorate disclose its annual implementation of the management system of information disclosure in its self-evaluation report on annual internal control. If the company is under supervision measures, criticize notice or public censure by the securities regulatory authorities due to its violation of information disclosure, the directorate should review and modify the system in time. Furthermore, it should conduct internal disciplinary actions on relevant persons in charge, with the punishment results reported to the exchange for putting on records within 5 working days.
The "Guidelines" details the content of the management system of information disclosure as follows:
Firstly, when formulating the management system of information disclosure, the company should, in line with the laws and regulations and the minimum requirements of the "Listing Rules", define the standards and scope of its information disclosure.
Secondly, with the principle of volunteer information disclosure, the system should encourage the company to take initiatives to timely disclose the information (except the sensitive financial information and commercial secrets) that will have a great impact on decision-making of shareholders and other stakeholders, including the company's development strategy, business ideas and the relationship between the company and stakeholders.
Thirdly, the system should define the internal flow of transfer, examination and disclosure of non-public information. All this ensures that the reporting of significant information to the Secretary to Directorate in due time before its submission to the Chairman of Directorate. The Chairman of Directorate, who then reports it to the directorate, will urge the Secretary to Directorate to organize disclosure of a temporary report.
Fourthly, the system should define the obligations of the company's financial department and outward investment department to cooperate with the management department of information disclosure. Besides, it should define the management and report system of information disclosure for its holding subsidiaries. Officials from the company's headquarters' departments or from other branches and subsidiaries will be the first responsible persons. Designated liaisons are responsible for reporting information to the management department of information disclosure or the secretaries to directorate. Moreover, it should work out the report system of significant information of controlling shareholders and major shareholders with more than 5% shares in the company. To ensure a smooth management of investors' relationship, it should also define the information communication system between the company and the investors, the securities service institutions and the media, with a principle of fair information disclosure for different investors.
Fifthly, the system should define the duties of the management department of information disclosure and all the other departments and officials within the application scope.
Sixthly, the system should establish an internal control and supervision mechanism for financial management and accounting, a file management system for documents and data of internal information disclosure, a good method to keep the secrecy of non-public information and a sound accountability mechanism for failure of information disclosure obligation.
The "Guidelines" stresses that the secretaries to directorate are responsible for fixing the training program for management system of information disclosure. They should carry out regular training programs on information disclosure system for directors, supervisors, senior management, officials from the headquarters' departments or from other branches and subsidiaries, and other staff and departments responsible for information disclosure. Moreover, they should report the annual training results to the SSE for putting on records.
