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Shenzhen bourse tightens disclosure

(Shanghai Daily)
Updated: 2006-08-11 15:34

The Shenzhen Stock Exchange issued rules yesterday to ban listed firms from divulging price-sensitive news to analysts and big shareholders ahead of public announcements as it bids to improve corporate governance.

Publicly traded firms are also prohibited from offering the information individually to institutional investors, including mutual funds and insurers, as well as the new media, the Shenzhen-based bourse said in a Website statement. All important facts on corporate issues must be made public to everyone at the same time, it said.

"We found some public firms had given crucial information to select parties, a practice that seriously affects the fairness of the market," the bourse said in the statement.

"Minority investors also need to be well informed."

Companies that violate the rules on disclosures could face public condemnation and fines, the exchange said.

China has been combating insider trading and embezzlement in its fledgling capital markets, which reversed a four-year plunge after a structural overhaul.

The country revised its securities law this year to grant stock exchanges more supervisory power such as halting trading in a company when irregularities occur.

The Shenzhen stock exchange early this month suspended trading in shares of Sinosteel Anhui Tianyuan Technology Co on its debut, complaining that an abnormal amount of the stock had changed hands - the first time China's stock exchanges exercised the right to do so to reduce market volatility.