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It has been one basic job for Shenzhen Stock Exchange to establish a standardized system for information disclosure fitting for market demands since the pilot program of industrial regulation started in 2011. Recently, SZSE released two information disclosure guidelines (hereinafter referred to as “Guideline No.3” and “Guideline No.4”) for photovoltaic industry and energy conservation and environmental protection industry on the ChiNext board. Together with the formerly enforced guidelines for the movie and television industry and the pharmaceuticals industry, a standardized system for information disclosure guidance has been preliminarily formed on the ChiNext board.
Photovoltaic and energy conservation and environmental industries are among the nation’s strategic emerging industries. Ever since its inception five years ago, the ChiNext board has been positioned itself to serving innovative and growth companies and has already gathered a large number of companies in the strategic emerging industries, among which, 11 companies are engaging in the business related to photovoltaic industrial chains and 16 companies are engaging in the energy conservation and environmental protection services. These industries have distinct characteristics from traditional industries, no matter in business or profit models, which cannot be fully covered by the existing information disclosure rules. In order to further improve the pertinence and effectiveness of information disclosure and better protect the legitimate rights and interests of investors, SZSE finally formulated and released the aforesaid guidelines based on daily supervision experience and opinions of market players.
Specifically speaking, the guidelines specify the following disclosure requirements:
Guideline No.3:
- first, key technical indicators, such as minority carrier lifetime, conversion efficiency, attenuation rate, etc., are required to disclose in detail in periodical reports, and product sales volume, gross margin, sales-output ratio and other important business information are required to disclose according to categories of technology;
- second, the main income source countries, sales volume and income, as well as local policy changes, etc. are required to disclose; and
- third, disclosure requirements for photovoltaic power station business and its financial and accounting treatment in periodic reports and provisional reports are further detailed.
Guideline No.4:
- first, distinguish two business types, i.e. project type and franchise type, and specify their disclosure requirements in periodic reports;
- second, make it further clear and unified in terms of the degree of risk disclosure, disclosure time-point standards for projects of EMC, BOT, O&M type;
- third, specify the disclosure requirements on special accounting treatments for project type and franchise type business; and
- fourth, provisional reporting mechanism for events which might have a significant effect on energy conservation and environmental protection projects, such as major environmental accidents and so on.
It is worth mentioning that SZSE has been adhering to market-oriented methods in the process of drafting the Guidelines, trying to let market factors play a decisive role. After the completion of the first draft, SZSE not only solicited comments from relevant listed companies, but also issued a questionnaire survey to more than 3000 investors nationwide, and invited fund companies, securities companies and other market institutions to participate in the formulation process; afterwards, SZSE discussed, revised and replied to the feedback item by item, showing full respect for market opinions.
So far, there have been four industrial information disclosures guidelines on the ChiNext board released by SZSE. According to the investor survey data in May 2015, 92% investors think the guidelines are of great help, and 89% investors are expecting guidelines for other industries. The Shenzhen markets are featured with small and medium-sized enterprises and distinguishing characteristic of emerging industries. Therefore, SZSE will continue to promote differentiation regulation, take emerging industries as the breakthrough point to study industry characteristics, sum up regulatory experiences, and release more industrial information disclosure guidelines fitting for market demands. At present, SZSE has already started the drafting of information disclosure guidelines for industries such as Internet video, games and e-commerce, which will be released later. At the same time, SZSE will also be in line with the regulatory concept centered on information disclosure, continue to steadily push forward industrial regulation, improve the pertinence and effectiveness of information disclosure, and make information disclosure in better service for investors.
