The SET’s Board of Governors resolved on Nov. 23 to provide clear guidelines for listed companies so that the firms provide accurate information corresponding to the facts, not overstating them. Furthermore they should give out information equitably to all audiences. Following these guidelines is an important factor in creating investor trust and adding value.
The SET will also train executives in the process of disclosing information. The new guidelines will help listed firms, fund managers, analysts, the press and other relevant parties know how to answer incoming queries appropriately.
Under these guidelines, companies must disclose information via the SET information distribution system before, or at least at the same time as, they distribute it through other channels. Listed companies will be responsible for the correctness, completeness and the presentation of such information.
The new policies will cover three types of information:
- Required disclosures: Information that has to be disclosed w/in a required time period, e.g., company financial statements, annual reports or any other information that needs to be immediately disclosed, including changes in the firm’s financial structure, changes of key executives, and announcements to pay or not to pay cash/stock dividends.
- Expected disclosures: Information to be disclosed whenever it appears that reported information in the media or any other channel (other than the SET information system) is inaccurate or is being referred to incorrectly. This will include clarifications when there are rumors, when research reports are based on inaccurate data or when the company’s share price has been affected by a third party’s claim.
- Optional disclosures: Information that firms may disclose to the public or not, at their own discretion. Nevertheless, if they opt to disclose, they must do so within a specified period of time. For example, if a company provides a financial forecast, such information should be regular and should be disclosed via the SET Info distribution system, either before or after the shareholders’ meeting. Company executives must be responsible for any released information and promptly point out any changes from prior disclosed information.
Forecasting significant events in a distant future must be done carefully. Executives should indicate only the trends or directions of the company, e.g., trends of capital change or dividend payment. They should avoid giving information as to on-going processes or what will happen in the near future, since this could lead to price manipulation affecting share price and/or trading volume. Executives must not comment on their firm’s share prices, as they may lead the market.
In giving information to analysts, executives should consider the trends of both the industry and the company as well as state how he/she derived figures or sales volume, and not sales value. Net profit figures or other information that can lead to the calculation of net profit must not be disclosed.
Non-compliance with these guidelines will cause the SET to take actions including verbal warning, written warnings; posting NP, H or SP signs; issuing investor alerts, public reprimands, and/or taking legal action.
