Listed companies’ disclosure and the role of stock exchanges
Introduction Recently, extra attention has been given to the ‘manipulators’ or ‘insiders’ within the Chinese securities market. Apart from other traditional economic crimes, civil offences and securities crimes conducted by listed companies imposed strong negative impacts on the Chinese securities market. It not only demolished the image of the listed companies, but also brought massive losses to investors. Reasons for the phenomenon are various; numerous researchers have focused on this issue already. However, it is argued in this chapter that the information disclosure system and stock exchanges as a whole can serve the purposes of control and preventing illicit and illegal conduct by the listed companies. As explained in Chapter 1, disclosure is one of the effective regulatory tools. Although, on the other hand, imperfect information disclosure may assist law breaking behaviour. The Chinese Criminal Law, Company Law, Securities Law and other laws and regulations have given a lot of attention to this issue. In this chapter the internal and external relationship between information disclosure rules, listed companies and stock exchanges will be analysed in order to suggest an effective regulatory regime. First, this chapter will discuss the basic information required of listed companies. Second, detailed disclosure requirements will be examined. A comparative study between Mainland China, the UK and Hong Kong will be carried out. Following this, the function of the stock exchanges will be analysed. This chapter demonstrates that the information disclosure regime is an efficient approach to prevent and control the offences and crimes conducted by listed companies, and that the stock exchanges can perform a unique role in this respect.