ABSTRACT
Table 1 shows that the number of unqualified listed companies reduces, “excellent” and “good” grade increases obviously during the period of 2001-2012. This situation indicates rating behavior of the Shenzhen Stock Exchange promotes
1 INTRODUCTION
The resource allocation efficiency of capital market depends on the pricing efficiency of security, which depends primarily on the extent of information asymmetry between security buyer and seller. A capital market is essentially an information market. Disclosure can reduce information asymmetry among capital market traders, so it is a major deciding factor that influences the function of capital market. The supervisory board of China’s capital market attaches great importance to the disclosure of listed company just at the moment of the establishment of the capital market. On the basis of the mature capital markets’ experiences, under the control of The Securities Law of The People’s Republic of China and The Company Law of The People’s Republic of China, the supervisory board of China’s capital market has established a system of disclosure rule that includes the criterion of the disclosure content and format of listed company, the compilation criterion of the disclosure of listed company, the answers of frequently asked questions and the analysis of the case of disclosure of listed company. The system of disclosure rule is already in line with international standards. However, the Chinese market is still an undeveloped market in a transitional economy and the disclosure of listed company still faces many problems. The disclosure regulation of the Chinese capital market has a long way to go. Evaluation of disclosure quality of listed company, a “moderate” external mechanism that can improve disclosure quality of listed company, is given to increase importance by theoretical circles and regulatory authorities. However, the theoretical research and practice of
improvement of the disclosure quality of listed companies which feel the pressure from the exchange, the media and investors. But we find also that more and more listed companies cluster together in “good” grade. Therefore, discrimination of rating behavior of the Shenzhen Stock Exchange is not enough. This difficult may be solved by disclosure index which is quantified.
