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2018 | OriginalPaper | Buchkapitel

4. Regulation of Information

verfasst von : He Weiping

Erschienen in: The Regulation of Securities Markets in China

Verlag: Palgrave Macmillan US

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Abstract

This chapter explores how information disclosure is regulated in China’s securities markets in relation to issuers and listed companies. It also deals with regulation of representations by financial intermediaries. Disclosure requirements under legislation, CSRC regulations, and exchange rules are also reviewed. Three major areas of non-compliance identified by the CSRC are then examined: non-compliance with profit forecast disclosure requirements; where information disclosure is not timely, accurate, and complete; and, related to party transactions, false statements, major omissions, or failure to disclose at all or in a timely fashion. The role played by stock analysts in China is discussed. The chapter makes a case that retail investors in China are heavily influenced by information they receive from financial intermediaries. The sector is largely self-regulated by the China Securities Association—the chapter discusses the reasons for this and critiques its adequacy, drawing some conclusions as to regulatory priorities within the CSRC.

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Fußnoten
1
EY, Disclosure effectiveness, November 2014.
 
2
By reliability is meant the extent to which disclosures can be trusted by users. See Financial Reporting Faculty, Financial Reporting Disclosures: Market and Regulatory Failures, 2013.
 
3
Q Leung, R Morris and S Gray, ‘Corporate Transparency in China: Factors Influencing Financial Disclosure Levels’ (Paper presented at the 17th Asia Pacific Conference on International Accounting Issues, Wellington, 23/11/2005).
 
4
Wen Qu and Philomena Leung, ‘Cultural impact on Chinese Corporate Disclosure-a Corporate Governance Perspective’ (2006) 21(3) Managerial Auditing Journal.
 
5
S Shi and D Weisert, ‘Cultural Influence on the Development of Accounting Systems Internationally’ (2002) 26(2) Journal of International Business Studies.
 
6
CSRC, CSRC Reporting on Information Disclosure Non-compliance Cases, 2013 http://​www.​csrc.​gov.​cn/​pub/​newsite/​zjhxwfb/​xwdd/​201305/​t20130517_​228423.​html accessed on 7/10/2016.
 
8
CSRC, OECD-China Policy Dialogue on Corporate Governance Corporate Governance of Listed Companies in China Self-assessment by the China Securities Regulatory Commission, OECD (2011) 51.
 
9
Securities law, Section 12.
 
10
Hu Maogang, Information Disclosure Rules, Journal of East China University of Political Science and Law, 2000, 3, p. 77.
 
11
Yvonne ching ling Lee, The elusive concept of “materiality” under U.S. federal securities laws, 40 Willamette L. Rev. 661 2004.
 
12
Securities Laws, Section 115.
 
13
Bai Yuqin, Reflections on the Listed companies Information Disclosure Rules, Tianjin Administrative Cadre institute of politics and law 2006, 1, p. 3.
 
14
Gan Peizhong, Zhang Juxia, Regulatory Authorities Under IPO Registration System, Law Application, 2015, 7, p. 47.
 
15
Securities Laws, s 193.
 
16
CSRC, Regulate Information Disclosure, Maintain ‘Open, Fair, Just’ Principle, 20/11/2013.
 
17
Gao Xujun, Civil Liability for Misrepresentations in the Securities Law, Finance and Law, 2016, 2, p. 100.
 
18
Huang tao and He Weiping.
 
19
Ding Dong, Theory and Practice on Legal Protection of Financial Consumers, Shanghai Politics and Law College Journal, 2016, 6, p. 1.
 
20
Information Disclosure by Companies Publicly Offering Securities-Content and Format No. 1 Prospectus (2015) (No. 1) (Revised in 2006) S 3.
 
21
The risk factors that an Issuer discloses shall include but are not limited to the following:
1.
Market prospects of products or services, changes in the operating environment of the industry, the impacts of business cycle or product life cycle, market saturation or segmentation, over reliance on a single market, and decline in the market share;
 
2.
Changes in operating models, unstable operating performance, fluctuation in prices of major products or materials, over-reliance on a single important raw material, over-concentration or scattering of products or services and business locations;
 
3.
Risks caused by inefficient internal control, asset liquidity risk caused by poor asset turnover, and insolvency risk due to inadequate cash flow and inappropriate debt structure, risks cause by inadequate provision for impairment of main assets, risks caused by significant volatility in the value of main assets, risks of significant volatility in net profits due to major contribution by non-recurring gains and losses or investment gains outside the scope of the consolidated financial statements, and risks with contingent events such as major guarantees, lawsuits and arbitration;
 
4.
Immature technology, lack of industrialization of technology, lack of effective protection for technology or short protection period, lack of core technology, or reliance on external organization for core technology, and products or technology being outmoded;
 
5.
Problems in investment projects in terms of market prospects, technology assurance, industrial policy, environmental protection, land use, funding arrangements, and co-operation with others, managerial risks relating to expansion of operation scale and coverage or business transformation, risk associated with business transformation, risk of falling profit due to sharp increase in depreciation of fixed assets, and risk with product sales caused by increase of capacity;
 
6.
Risks caused by the changes in laws, regulations, and policies on fiscal issues, finance, taxation, land use, industry policy, industry regulation, and environmental protection; and
 
7.
Other factors that may significantly affect the company’s continued operation, such as natural disasters, work safety, changes in foreign exchange, and foreign trade environment.
 
 
22
Zheng Yu, Legal Analysis of Information Disclosure Rules, 2014, 13 Securities Law Forum.
 
23
Information Disclosure by Companies Publicly Offering Securities-Content and Format No. 2 Annual Report (2016) section 26.
 
24
CSRC, CSRC Annual Report 2014, 27.
 
25
They are:
1.
A major change in the business guidelines or business scope of the company;
 
2.
A decision of the company on any major investment or major purchase of an asset;
 
3.
An important contract as concluded by the company, which may produce an important effect on the assets, liabilities, rights, and interests or business achievements of the company;
 
4.
The incurrence of any major debt in the company or default on any major debt that is due, or the occurrence of liability for any large sum of compensation;
 
5.
The incurrence of any major deficit or a major loss in the company;
 
6.
A major change in the external conditions for the business operation of the company;
 
7.
The change of any director, one third or more of the supervisors or managers of the company, or the chairman of the board of directors or the manager being unable to perform his duties;
 
8.
A considerable change in the shares of the shareholders or actual controllers each of whom holds or controls no less than 5% of the company’s shares;
 
9.
A decision of the company on capital decrease, merger, split-up, dissolution, or application for bankruptcy, or entering into the bankruptcy procedure, or being ordered to close down in accordance with the law;
 
10.
Any major litigation, arbitration in which the company is involved, or where the resolution of the general meeting of shareholders or the board of directors has been cancelled or invalidated;
 
11.
The company is investigated, given any criminal punishment or major administrative punishment by the competent organ due to any violation of law or regulation, or any director, supervisor, or senior manager of the company is investigated or subject to mandatory measures by the competent organ due to any violation of law or discipline;
 
12.
Any newly promulgated law, regulation, rules, or industrial policy that may considerably affect the company;
 
13.
A resolution of the board of directors on the new stock offering plan, or any other financing plan or equity incentive plan;
 
14.
A court ruling which prohibits the controlling shareholder from transferring its shares; or 5% or more of the shares held by any shareholder is pledged, frozen, judicially auctioned, kept in custody, or in trust, or the voting rights of such shareholder are limited;
 
15.
The main assets have been sealed up, detained, frozen, mortgaged, or pledged;
 
16.
The main or all businesses have stopped;
 
17.
Providing any important external guaranty;
 
18.
Obtaining a large sum of government subsidy or any other extra proceeds which are likely to produce important effects on the assets, liabilities, rights, and interests, or business achievements of the company;
 
19.
Changes in the accounting policies or accounting estimates;
 
20.
There is any error in the information disclosed previously, or because the company fails to disclose information as required, or because the information disclosed contains any false record so that the company is ordered to make a correction by the relevant organ or the board of directors of the company decides to make a correction;
 
21.
Other circumstances as prescribed by the CSRC.
 
 
26
Dong Xinyi, Listed Companies Information Disclosure, Securities Law Forum, 2014, 2, p. 25.
 
27
CSRC, OECD-China Policy Dialogue on Corporate Governance Corporate Governance of Listed Companies in China Self-assessment by the China Securities Regulatory Commission, OECD (2011) 52.
 
28
Shenzhen Stock Exchange, Listed Companies Information Disclosure Appraisal (2013). According to 2013 Shenzhen Stock Exchange Listed Companies Information Disclosure Assessment Rules, trueness is measured against:
1.
Disclosed document is based on facts or on judgements and suggestions based on facts;
 
2.
Disclosed document reflects the facts in an objective manner, whether there are false or untrue statements; and
 
3.
Whether disclosed documents are falsified or altered.
 
Accuracy is measured against:
1.
Whether there is an error with key words or figures in the disclosed document, and the impact of the error;
 
2.
Whether the disclosed document is written in a concise, clear, and understandable manner;
 
3.
Whether there are ambiguous and misleading statements;
 
4.
Whether the correct category for disclosure has been chosen; and
 
5.
Whether correct reference numbers have been chosen.
 
Completeness is measured against:
1.
Whether documents are complete;
 
2.
The format of the disclosed document complies with standards;
 
3.
Whether the content is complete, or whether there is a major omission;
 
4.
The correct category for disclosure has been chosen; and
 
5.
The correct reference numbers have been chosen.
 
Timeliness is measured against:
1.
Whether disclosed periodic reports, preliminary earnings estimates, performance forecasts, and amendments notices are in compliance with the time requirements;
 
2.
Whether disclosed interim reports are in compliance with the time requirements.
 
Fairness is measured against:
1.
Whether the matter was disclosed or leaked to other parties prior to public disclosure;
 
2.
Whether the trading was abnormal due to the information leak prior to public disclosure;
 
3.
Whether there were any reports by other media apart from the designated media prior to public disclosure;
 
4.
Whether the company publicizes Investor Relations Activities Records After investor relations activities.
 
In addition, the Shenzhen Stock Exchange also identifies the principle of compliance which is measured against:
1.
Whether the disclosed matter is in compliance with laws, regulations, and the rules of the Exchange;
 
2.
Whether the procedural matters associated with the disclosed matter are in compliance with laws, regulations, and the rules of the Exchange.
 
 
29
Responsible persons are directors, supervisors, and senior personnel: see Listing Rules of Shanghai Stock Exchange s2.2. The Shanghai Exchange at the same time released the Shanghai Exchange Information Disclosure Publication Category Index in 2013. This divided information into 35 categories, including periodic reports, board of directors and board of supervisors, meetings of shareholders, and so on. There are subcategories within each category. For example, under the category of meetings of shareholders there are ten subcategories, including, among others, notices of holding a shareholder meeting, cancellation of the meetings, and shareholders calling the meetings.
 
30
Periodic disclosure includes yearly, half-yearly, and quarterly disclosures: S6.1 Listing Rules of Shanghai Stock Exchange.
 
31
By reliability is meant the extent to which disclosures can be trusted by users.
 
32
Bai Yuqin, Reflections on Listed companies Information Disclosure System, Tianjin Politics and Laws Leadership University Review, 2006, 1, p. 3.
 
33
Listing Rules of Shanghai Stock Exchange (2014) 17.1.
 
34
Listing Rules of Shanghai Stock Exchange (2014) 17.2–17.6.
 
35
Shanghai Stock Exchange, Shanghai Stock Exchange 2014 Self-regulation Report, http://​www.​sse.​com.​cn/​disclosure/​credibility/​whitepaper/​c/​4118097.​pdf accessed on 7/10/2016.
 
36
Ru Wendao, Wang Wenxin, The Efficacy of Public Censure, Securities Law Forum, 2012, 2.
 
37
For example, ASX recognizes its power limitations. Enforcing Compliance with ASX’s Operating Rules, http://​www.​asx.​com.​au/​documents/​asx-compliance/​operating-rules-enforcement.​pdf accessed on 7/10/2016.
 
38
Shanghai Stock Exchange, Guidelines on Information Disclosure Direct System, 2013.
 
39
Shanghai Stock Exchange, Guidelines on Information Disclosure Direct System, 2013 S 8(6).
 
40
Shenzhen Stock Exchange, Guidelines on Information Disclosure Direct System, 2015 S 14(6), s3.
 
41
Discussions about the role of media and stock analysts will follow in the second half of the chapter.
 
42
A speech by John Price, Commissioner, Australian Securities and Investments Commission, Selective disclosure of confidential, price-sensitive information, http://​download.​asic.​gov.​au/​media/​1346696/​Selective-disclosure--John-Price.​pdf accessed on 11/04/2017.
 
43
SEC Says Social Media OK for Company Announcements if Investors Are Alerted, https://​www.​sec.​gov/​news/​press-release/​2013-2013-51htm accessed on 11/04/2017.
 
44
Shanghai Stock Exchange, Guidelines on Information Disclosure Direct System, 2013 S 2.
 
45
Shi Weidong, Civil Liability of stock exchanges in relation to Equity Certificate Information Disclosure, 2010, 2, p. 408.
 
46
Sun Dongmei, Zhang Lei, Legal issues of Derivative products, Law and Society, 2013, 9, 68.
 
47
Su Peike, CCTV Securities, Information Disclosure Direct System is not the Answer, 29/01/2013.
 
48
CSRC, CSRC Annual reports 2012, 2013, and 2014, 30.
 
49
CSRC Media conference 30/05/2014.
 
50
Yu Zheng, Regulating forward-looking Information Disclosure in Chinese Securities Market-Past, Present and Future.
 
51
The reporting season for the Chinese is the end of June for the previous year.
 
52
China News, Change of HangTian TongXun Profitability, http://​www.​chinanews.​com/​cj/​2014/​03-26/​5996333.​shtml accessed on 22/12/2016.
 
53
Shanghai Stock Exchange, Decisions on Public Censure of Hangtian Tongxin Group and its Responsible Persons (2014).
 
54
Hangtian Tongxin, Public Announcements, 22/09/2014.
 
55
Shanghai Stock Exchange, Zhongxin Technology Changed its profit after IPO, http://​www.​cs.​com.​cn/​ssgs/​gsxw/​201609/​t20160908_​5052114.​html accessed on 22/12/2016.
 
56
Shanghai Stock Exchange, Zhongxin Technology, 07/09/2016.
 
57
Shanghai Stock News, 15 listed companies changed their profits within two years’ of their IPO, http://​finance.​ifeng.​com/​a/​20160713/​14594120_​0.​shtml accessed on 22/12/2016.
 
58
ST LuBei, 2009 1st Quarter Report.
 
59
Section3, Chapter 11 of Shenzhen Stock Exchange Listing Rules and Section3, Chapter 11 of Shanghai Stock Exchange Listing Rules. For example, when the revision should be released to the public.
 
60
Cheng Fan, Forecast information disclosure, CUFE Law review, 2012, 1, p. 103.
 
61
Shanghai Stock Exchange, Index, Zongshen Doingli on 26/08/2014.
 
62
The actual figure was RMB 3,052,579,900.
 
65
Shanghai Stock Exchange, Index, Yongan Lingye, 14th and 15th May 201.
 
66
Zhang Wenting, Shi Guanglong, Innovation Mechanism in Capital Markets, Securities Law Forum, 2012, 2, p. 766.
 
67
Zhang Wenting, Shi Guanglong, Innovation Mechanism in Capital Markets, Securities Law Forum, 2012, 2, p. 766.
 
68
A corporate person who is under any of the following circumstances shall be an affiliate of a listed company:
(a)
A legal person who directly or indirectly controls the listed company;
 
(b)
A legal person who is directly or indirectly controlled by the legal person as mentioned in the preceding sub-item but who is not the listed company or its subsidiary;
 
(c)
A legal person who is directly or indirectly controlled by an affiliated natural person, or in which an affiliated natural person assumes the position of a director or senior manager, but who is not the listed company or its subsidiary;
 
(d)
A legal person holding 5% or more shares of the listed company, or the concerted party thereof;
 
(e)
The occurrence of any of the circumstances as mentioned above during the past 12 months or in the future 12 months under the arrangement of the relevant agreement; and
 
(f)
Any other legal person which the CSRC or stock exchange or listed company confirms according to the principle of priority of the essence over the form that there is a special relationship between it and the listed company which may cause or has already caused the listed company to incline to its interests.
 
The natural persons under any of the following circumstances shall be affiliated natural persons of the listed company:
(a)
The natural persons who directly or indirectly hold 5% or more shares of a listed company;
 
(b)
The directors, supervisors, and senior managers of a listed company;
 
(c)
The supervisors, supervisors, and senior managers of the legal person who directly or indirectly controls the listed company;
 
(d)
The intimate family members of the persons as mentioned in sub-items (a) and (b), including the spouse, parents, and children who have attained to the age of 18 and the spouse thereof, brothers and sisters and the spouse thereof, as well as the parents of the children’s spouse.
 
(e)
The occurrence of any of the circumstances as mentioned above during the past 12 months or in the future 12 months under the arrangement of the relevant agreement; and
 
(f)
Any other natural person which the CSRC or stock exchange or listed company confirms according to the principle of priority of the essence over the form that there is a special relationship between him and the listed company which may cause or has already caused the listed company to incline to its interests.
 
 
69
Consolidation of 9.1 and 10.1.1 of Shanghai Stock Exchange Stock Offering Rules (2014).
 
70
Li Zhongli, Thoughts on Legal Constraints of Related Party Transactions, Technology and Law, 2010, 2, p. 93.
 
71
CRSC, Administrative Penalty Decision on Tianyi Technology, and Feng Xiaoting etc., http://​www.​csrc.​gov.​cn/​pub/​zjhpublic/​G00306212/​200804/​t20080418_​14188.​htm?​keywords= accessed on 21/03/2017.
 
72
CSRC, Notice on Cleaning up Majority Shareholders Divulging Company funds 2010, http://​www.​csrc.​gov.​cn/​pub/​newsite/​flb/​flfg/​bmgf/​ssgs/​gljy/​201012/​t20101231_​189881.​html accessed on 21/03/2017.
 
73
CSRC, Administrative Penalty Decision on Weifang Beida Qingniao Huguang Technology, Zhou Yanjun, Xu Zhengdong etc., http://​www.​csrc.​gov.​cn/​pub/​zjhpublic/​G00306212/​201506/​t20150609_​278688.​htm accessed on 25/12/2016.
 
74
Xinhua, Shanghai Stock Exchange Building Information Disclosure Risk Classification and Management System 30/05/2002, http://​news.​xinhuanet.​com/​fortune/​2002-05/​30/​content_​415141.​htm accessed on 25/12/2015. According to how well they disclose information, listed companies are classified into Group 1 and Group 2, with Group 2 subdivided into five bands.
 
75
Rules on Listed Companies Information Disclosure Assessment (Pilot) (2015) S 19.
 
76
Appendix 1 of the Rules.
 
77
Shenzhen Stock Exchange, Expanding trial of Information Disclosure Direct System 2012.
 
78
Shenzhen Stock Exchange, Improving Information Disclosure 2014, http://​www.​szse.​cn/​main/​aboutus/​bsyw/​39755620.​shtml accessed on 25/10/2015. ‘A’ is the most satisfactory level in terms of the quality of disclosure. Section 17 of the 2013 Shenzhen Stock Exchange Listed Companies Information Disclosure Assessment Rules identifies 20 circumstances where a company should not be given an ‘A’ status. A company must be given a ‘C’ or a ‘D’ status if one of the circumstances occurs as listed in sections 18 and 19 respectively.
 
79
Shenzhen Stock Exchange, Listed Companies Information Disclosure Appraisal Rules 2011.
 
80
David Weil, Archon Fung, Mary Graham and Elena Fagotto, The Effectiveness of Regulatory Disclosure Policies, Journal of Policy Analysis and Management, Vol. 25, No. 1, 155–181 (2006).
 
81
Securities and Exchange Commission, Regulation Analyst Certification, https://​www.​sec.​gov/​rules/​final/​33-8193.​htm accessed on 29/09/2016.
 
82
Donald C. Langevoort, ‘Investment Analysts and the Law of Insider Trading’ (1990) VA. L. REV.(76) 1025.
 
83
Toronto Stock Exchange, Investment Dealers Association and Canadian Venture Exchange, Setting analyst standards: recommendations for the supervision and practice of canadian securities industry analysts, (2001) 20.
 
84
Toronto Stock Exchange, Investment Dealers Association and Canadian Venture Exchange, Setting analyst standards: recommendations for the supervision and practice of canadian securities industry analysts, (2001) 20.
 
85
P. O’Brien, R. Bhushan, Analyst following and institutional ownership, Journal of Accounting Research, 28 (1990), pp. 55–76, M. Clement, Analyst forecast accuracy: Do ability, resources and portfolio complexity matter?, Journal of Accounting and Economics, 27 (1999), pp. 285–304, A. Admati, P. Pfleiderer, A monopolistic market for information, Journal of Economic Theory, 39 (1986), pp. 400–438, 1. D. Diamond, R. Verrecchia, Information aggregation in a noisy rational expectations economy, Journal of Financial Economics, 9 (1981), pp. 221–235, K. Chung, H. Jo., The impact of security analysts’ monitoring and marketing functions on the market value of firms, Journal of Financial and Quantitative Analysis, 31 (1996), pp. 493–512.
 
86
Prepared written testimony of Gregg S. Hymowitz, a Founder and Principal of EnTrust Capital Inc., for the U.S. House of Representatives’ Committee on Financial Services. Testimony prepared for Thursday, June 14, 2001. For the U.S. House of Representative’s Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee’s hearing entitled, “Analyzing the Analysts: Are Investors Getting Unbiased Research from Wall Street?” To be presented at 2128 Rayburn House Office Building at 10:00 am.
 
87
Kelly S. Sullivan, ‘Serving Two Masters: Securities Analyst Liability and Regulation in the Face of Pervasive Conflicts of Interest’ (2001) 70(2) UMKC Law Review.
 
88
Kelly S. Sullivan, ‘Serving Two Masters: Securities Analyst Liability and Regulation in the Face of Pervasive Conflicts of Interest’ (2001) 70(2) UMKC Law Review.
 
89
Prepared written testimony of Gregg S. Hymowitz, a Founder and Principal of EnTrust Capital Inc., for the U.S. House of Representatives’ Committee on Financial Services. Testimony prepared for Thursday, June 14, 2001. For the U.S. House of Representative’s Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee’s hearing entitled, “Analyzing the Analysts: Are Investors Getting Unbiased Research from Wall Street?” To be presented at 2128 Rayburn House Office Building at 10:00 am.
 
90
Analysts often do not get access to a company without giving positive reviews of the company’s stock. Companies give access to those analysts who can lend credibility to their stock. See Robert P. Sieland, ‘Caveat Emptor! After All the Regulatory Hoopla, Securities Analysts Remain Conflicted on Wall Street’ (2003) (2) University of Illinois Law Review.
 
91
The coexistence of brokerage services and underwriting services in the same institution leads sell-side analysts to compromise their responsibility to brokerage clients in order to attract underwriting business: see Patricia m. Dechow, Amy p. Hutton, Richard g. Sloan, The Relationship Between Analysts’ Forecasts of Long-Term Earnings Growth and Stock Price Performance Following Equity Offerings, Contemporary Accounting Research, Volume 17, Issue 1, Spring 2000.
 
92
Toronto Stock Exchange, Investment Dealers Association and Canadian Venture Exchange, Setting analyst standards: recommendations for the supervision and practice of canadian securities industry analysts, (2001) 29.
 
93
Toronto Stock Exchange, Investment Dealers Association and Canadian Venture Exchange, Setting analyst standards: recommendations for the supervision and practice of canadian securities industry analysts, (2001) 30.
 
95
Kelly S. Sullivan, ‘Serving Two Masters: Securities Analyst Liability and Regulation in the Face of Pervasive Conflicts of Interest’ (2001) 70(2) UMKC Law Review 421.
 
96
Ron Michaely and Kent L. Womack, ‘Conflict of Interest and the Credibility of Underwriter Analysis Recommendations’ (1999) 12(4) The Review of Financial Studies, Special.
 
97
Toronto Stock Exchange, Investment Dealers Association and Canadian Venture Exchange, Setting analyst standards: recommendations for the supervision and practice of canadian securities industry analysts, (2001) 33.
 
98
Barbara Black, ‘Are Retail Investors Better Off Today?’ (2007–2008) Brook. J. Corp. Fin. & Com. L.
 
99
Jill E. Fisch, ‘Does Analyst Independence Sell Investors Short?’ (2007) 39 UCLA Law Review 39 and Jill E. Fisch and Hillary A. Sale, ‘The Securities Analyst as Agent; Rethinking the Regulation of Analysts’ (2003) IOWA Law Review and Securities & Derivatives Industry Association and Securities Institute, Best Practice Guidelines for Research Integrity, http://​www.​stockbrokers.​org.​au/​Portals/​2/​Documents/​Best%20​Practice%20​Guidelines.​pdf
 
100
Regulation FD: Selective Disclosure, 17 Code of Federal Regulations, 243 (2002).
 
101
Securities Law S 169.
 
102
Daniel M. Anderson, ‘Taking Stock in China: Company Disclosure and Information in China’s Stock Markets’ (1999–2000) 88 Georgetown Law Journal 1949.
 
103
Several Rules on Regulating Securities and Futures Information Communications 1997, Section 3.
 
104
Interim Procedures on Administration of Securities and Futures Investment Consultancy and its implementation guidelines Section 3.
 
105
Interim Procedures on Administration of Securities and Futures Investment Consultancy and its implementation guidelines S14.
 
106
Beifang Wang, Vice-chairman of the CSRC Shi Meilun: Introducing Stock Analysts, http://​economy.​enorth.​com.​cn/​system/​2002/​05/​22/​000335726.​shtml accessed on 22/03/2017.
 
107
Measures for the Administration of the Qualifications of Securities Practitioners 2002, Section 5.
 
108
Measures for the Administration of the Qualifications of Securities Practitioners 2002, S18.
 
109
Institution refers to: securities companies, fund management companies, trust assets management companies, funds and securities investment consulting institutions, securities credit rating institutions, and any other institutions specified by the CSRC: see Measures for the Administration of the Qualifications of Securities Professionals2002 Section 3.
 
110
Section 126 of the Securities Law 1998 prohibits public servants or employees of securities exchanges, securities registering and clearing companies, and securities companies, who were fired from their posts for illegal activities being reemployed as employees of securities companies.
 
111
For example, CSRC Beijing Bureau, Notice on Further Standardizing Publishing Securities Research Report and other Business Conduct (2016).
 
112
CSRC Shanghai Bureau, Notice on Further Standardizing Publishing Securities Research Report and other Business Conduct (2016).
 
113
Such as Rui Cheng from BOCOM & Schroders, and Li Miao from Han Tong Securities.
 
114
CSRC, CSRC report on Regulation of Institutions, 2016.
 
115
Section 9 of the Interim Provisions on the Publication of Securities Research Reports: ‘A securities research report shall be made under the principles of compliance, objectivity, specialization and prudence. A securities analyst who signs a securities research report shall be responsible for the contents of and views expressed in the report, and ensure that the sources of information comply with laws and regulations, the research methods are professional and prudential and the analysis conclusions are reasonably founded.’
 
116
CSRC, Administrative Penalty Decision (Guanhai Guanchao, Liu Kai bing, etc.,) 2009.
 
117
CSRC, Administrative Penalty Decision (Zhi Duoying, Huang Jian etc.,) 2009.
 
118
CSRC, Administrative Penalty Decision (Shanghai Tianli, Shenzhen Qianyan, Xiong Bibo etc.,) 2010. Section 19 of the Interim Consultancy Procedures (1997): ‘Securities and futures investment consultancy institutions and their investment consultants should abide by the established principles of prudence, honesty and diligence in the business and provide securities and futures investment consultancy services to investors and clients.’ Section 20 of the Interim Consultancy Procedures (1997): ‘Securities and futures investment consultancy institutions and their investment consultants should use related information and data objectively, precisely and completely in providing investment analyses, forecasts and suggestions to investors and clients. They are not allowed to quote related information and data out of their context or tamper with the related information and data. When quoting related information and data, the sources and copyright holders shall be noted.’
 
119
China Securities Association, Stock Analysts and Investment Consultants Committee, http://​www.​sac.​net.​cn/​ljxh/​jgsz/​fzjg/​201311/​t20131108_​73106.​html accessed on 5/10/2016.
 
120
Measures for the Administration of the Qualifications of Securities Practitioners 2002, S18.
 
121
Measures for the Administration of the Qualifications of Securities Practitioners 2002 Section 21.
 
122
China Securities Association, Notice on Securities Practitioners Annual Appraisal (2012).
 
123
Measures for the Administration of the Qualifications of Securities Practitioners 2002, S15.
 
124
Measures for the Administration of the Qualifications of Securities Practitioners 2002, S16.
 
125
Measures for the Administration of the Qualifications of Securities Practitioners 2002, S11, Chapters 3 and 5.
 
126
China Securities Association, China Stock Analysts Professional Rules 2012.
 
127
Independence requires the analyst to be honest, and that he/she should not use their position and information for their own or others advantage, and should not provide analysis, prediction, or recommendation with omission, false information, and misleading narratives. Objectivity refers to analysts basing their analyses, predictions, and recommendations on research. Diligence means that analysts should conduct thorough research before they provide analyses, predictions, and recommendations. Justness and fairness means they can’t provide contrary views to different investors at the same time and on the same issue.
 
128
China Securities Association, China Stock Analysts Professional Rules 2012, Section 5.
 
129
In 2013, the Association issued China Securities Association Rules on Managing Creditability (which was revised in 2015).
 
130
China Securities Association, Notice on Registration of Securities Investment Consultants and Stock Analysts, http://​www.​sac.​net.​cn/​cyry/​zgpt/​zggg/​201011/​t20101117_​32121.​html accessed on 22/03/2017.
 
131
Taking CITIC Securities as an example, brokerage and investment banking experienced 119.14% and 29.78% growth, respectively, from 2014 to 2015: see p. 44, Annual Report 2015, CITIC Securities Company Limited.
 
132
See p. 17, Annual Report 2015, CITIC Limited, and similarly Hantong Securities, etc.
 
133
China Securities News, Development of Securities Sector, 2011.
 
134
Sun, W., Peng, X., 2010, July 27, Plagiarism in research reports reflects internal auditing loopholes of brokerage firms, Securities Times, Wu, T., Pan, X., 2011, December 14. The independence of sell-side analysts call into question, Securities Daily, Qu, H., Liu, W., Sheng, T., 2014, July 8. Twisted analysts research: from digging information to digging insiders, Shanghai Securities News, Zhang, L., 2011, March 17, The interests chain underlying research reports issued by brokerage firms, Beijing Business Today.
 
135
Xunan Fenga, Na Hub, Anders C. Johansson, Ownership, analyst coverage, and stock synchronicity in China, International Review of Financial Analysis, Volume 45, May 2016, Pages 79–96.
 
136
Z. Gu, Z. Li, G. Yang, Monitors or predators: The influence of institutional investors on sell-side analysts The Accounting Review, 88 (2013), pp. 137–169, C. Lin, P. Liu, Y. Xuan, The client is king: Do mutual fund relationships bias analyst recommendations?, Journal of Accounting Research, 51 (2013), pp. 165–200.
 
137
Piotroski, J.D., Wong, T.J., Zhang, T., 2011. Political incentives to suppress negative information: evidence from Chinese listed firms. Working paper. Stanford University.
 
138
Xunan Fenga, Na Hub, Anders C. Johansson, Ownership, analyst coverage, and stock synchronicity in China, International Review of Financial Analysis, Volume 45, May 2016, Pages 79–96.
 
139
Nianhang Xu, Xuanyu Jiang, Kam C. Chan, Zhihong Y, Analyst coverage, optimism, and stock price crash risk: Evidence from ChinaOriginal Research Article, Pacific-Basin Finance Journal, Volume 25, November 2013, Pages 217–239.
 
141
Interim Provisions on Strengthening the Supervision over Securities Investment Consulting Services Using “Stock Picking Software” 2012.
 
142
Shyam Sunder, Theory of Accounting and Control 1997, p. 87.
 
143
Shenzhen Stock Exchange, 2011. 2010 Survey of the Status of Individual Investors.
 
144
Firth, M., Lin, C., Liu, P., Xuan, Y., 2013. The client is king: do mutual fund relationships bias analyst recommendations? J. Account.Res. 51 (1), 165–200. Gu, Z., Li, Z., Yang, Y., 2013. Monitors or predators: the influence of institutional investors on sell-side analysts. Account. Rev. 88 (1), 137–169.
 
145
J.D. Piotroski, T.J. Wong, T. Zhang, Political incentives to suppress negative information: evidence from Chinese listed firms, Working paper, Stanford University (2011), Nianhang Xu, Xuanyu Jiang, Kam C. Chan, Zhihong Y, Analyst coverage, optimism, and stock price crash risk: Evidence from ChinaOriginal Research Article, Pacific-Basin Finance Journal, Volume 25, November 2013, Pages 217–239.
 
146
Shanghai Stock Exchange, Survey on China Stock Analysts Information Analysis Capacity, 2005, http://​www.​sse.​com.​cn/​aboutus/​research/​jointresearch/​c/​plan20050201f.​pdf accessed on 30/09/2016.
 
147
Li, J., 2008. Whose order to follow: mutual funds’ pressure on stock analysts. Twenty-First Century Business Herald. (November 27). H. Liu, X. Zhang, Fading vows: an investigation of the unspoken rules in the sell-side analyst industry, twenty-first Century Business Herald (2008) (November 28), D. Wang, The unspoken rule for stock analyst ranking: protecting stocks held by mutual fund clients, Beijing Business Daily (2009) (July 15).
 
148
This view was shared by several interviewees.
 
150
Eastmoney, Best Securities Analysts Ranking 2016 http://​finance.​eastmoney.​com/​news/​1345,2017010970118048​4.​html accessed on 12/04/2017.
 
151
Survey interviewee.
 
153
CSRC, Administrative Penalty Decisions on Li Desheng and Ding Yanseng, http://​www.​csrc.​gov.​cn/​pub/​zjhpublic/​G00306212/​201403/​t20140312_​245409.​htm accessed on 21/03/2017.
 
155
In fact, there is no such thing as a graphene mine. The substance does not occur naturally—it is manufactured from graphite.
 
157
Wu Junqiao, China’s Securities Markets 2011, Securities Law Forum, 2012, 1, p. 486.
 
Metadaten
Titel
Regulation of Information
verfasst von
He Weiping
Copyright-Jahr
2018
DOI
https://doi.org/10.1057/978-1-137-56742-0_4