Shenzhen Stock Exchange releases guideline for information disclosure of civil engineering to deepen industry regulation

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In order to further regulate the information disclosure of listed companies engaging in civil engineering and construction industry, Shenzhen Stock Exchange (SZSE) has recently formulated and released the No. 7 Guideline of Shenzhen Stock Exchange for Industry Information Disclosure of Listed Companies Engaging in Civil Engineering and Construction Business.

In recently years, SZSE has been earnestly implementing the regulation transformation deployment of China Securities Regulatory Commission (CSRC). Centering on information disclosure and oriented with investors’ needs, SZSE has steadily moved industry regulation forward and focused on enhancing the effectiveness and pertinence of listed companies’ information disclosure. Currently, SZSE has fully implemented industry regulation across Shenzhen market and released information disclosure guidelines for a series of industries including livestock and aquaculture, solid mineral resources, real estate, seed industry and planting, engineering machinery, and decoration.

The newly released Guideline is one of SZSE’s moves to further reinforce the front-line regulatory rule system of the multi-tiered capital market and improve the information disclosure quality of listed companies. It standardizes the disclosure obligations of listed companies engaging in the business of interest from multiple dimensions including periodic and extraordinary reports, initial and continual disclosure, and financial and non-financial information, concentrating on enhancing the effectiveness and pertinence of information disclosure.

The civil engineering and construction industry features great exposure to national policies and financial environment, as well as multiple implementation models and long term of engineering projects. Accordingly, the Guideline requires listed companies of interest to fully disclose industry-related macro-economic situation, industry policy environment, development of industries involved in the principle businesses, and domestic and international market supply and demand and quarterly publish the operation data reflecting features of the civil engineering and construction industry.

Moreover, listed companies of interest are also required to make sufficient disclosure of the business model for implementing engineering projects and the construction and settlement schedules of major projects.

During the development of the Guideline, SZSE solicited opinions from listed companies for twice, invited the industrial analysts of securities companies to participate in the guideline formulation, earnestly listen to the opinions and suggestions of listed companies and market research institutions, and discussed the feedback piece by piece to fully take reasonable advice on revision. In addition, SZSE conducted online survey on its official website in which about 600 small and medium investors participated. According to the survey result, around 80% of investors believe that the guideline would help them know about the financial related conditions of listed companies for making better investment decisions.

An SZSE principal said, as industry regulation keeps being moved to greater depth, SZSE will continue its research on industry features and summarize regulatory experience. Through rule construction and active instructions, SZSE will urge listed units to keep improving the effectiveness and pertinence of information disclosure and drive the sound development of the multi-tiered capital market.

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