On September 8, 2021, the First Management Department of Listed Companies of the National Equities Exchange Corporation issued a warning letter to the New Third Board Company, Asia Pacific Tianneng, and relevant responsible entities, confirming that the company had not fully disclosed to investors in the "Indicative Announcement on Preparing for Public Offering of Shares and Listing on the Stock Exchange" disclosed earlier Fully disclosing the fact that its financial data does not comply with the financial indicators specified in the "Beijing Stock Exchange Stock Listing Rules (for Trial Implementation)" (draft for comment) and the "National Hierarchical Management Measures for Small and Medium Enterprise Share Transfer System" constitutes a violation of information disclosure, and it is decided to take self-discipline and regulatory measures against the company and relevant responsible entities. The decision of the National Equities Exchange Corporation on this self-regulatory regulatory measure for Asia Pacific Tianneng is the first time since the establishment of the Beijing Stock Exchange that it has made a decision on punishment for information disclosure violations by referring to the supporting rules of the Beijing Stock Exchange. It also reflects the determination of regulatory authorities to crack down on information disclosure violations. Information disclosure, as the core content of China's securities market registration system reform, particularly emphasizes that securities issuers should truthfully, accurately, and completely disclose information that should be disclosed according to law, to improve the transparency of the securities market. So, what specific requirements does the Beijing Stock Exchange have for information disclosure of qualified companies on the New Third Board that do need to be publicly listed on the Beijing Stock Exchange? This article intends to explore this issue with reference to the provisions of the Beijing Stock Exchange on information disclosure obligations.

1、 Institutional framework for information disclosure

The current system in China mainly regulates the information disclosure obligations of securities issuers from three dimensions: laws, regulations of the China Securities Regulatory Commission, and self-discipline management rules of stock exchanges. The newly revised Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law") has been officially implemented since March 1, 2020. Chapter V of the Securities Law uses a dedicated chapter to systematically regulate information disclosure, which mainly includes: (1) expanding the scope of information disclosure obligors, clarifying the cooperation of controlling shareholders and actual controllers in fulfilling information disclosure requirements, and strengthening the information disclosure obligations of directors, supervisors, and senior management personnel of the issuing entity; (2) Clarify the application documents for securities issuance submitted by issuers, and specify the specific circumstances and methods for submitting annual reports, interim reports, and interim reports on major events that should be announced; (3) Improve the general requirements for information disclosure, requiring information disclosure obligors to fully disclose information that has a significant impact on the price of securities transactions, and requiring that the content be true, accurate, complete, concise, clear, and understandable, without false records, misleading statements, or significant omissions; (4) Standardize voluntary disclosure behavior and clarify that information disclosure obligors can voluntarily disclose true, non misleading information that is valuable to investors' investment decisions; (5) It is stipulated that the disclosed information should be published on the website of the securities trading venue and the media meeting the conditions specified by the CSRC. The provisions on information disclosure in the Securities Law constitute the upper law requirements for information disclosure by issuers.

In addition to the relevant provisions of the Securities Law, companies listed on the Beijing Stock Exchange are also required to comply with the newly revised Measures for the Administration of Information Disclosure by Listed Companies promulgated by the China Securities Regulatory Commission and implemented on May 1, 2021. This measure details the content of the Securities Law, and lists the preparation content, format, and disclosure process of annual reports, interim reports, and interim reports; Detailing the specific circumstances under which interim reports should be submitted; Clarify the obligations of listed companies to establish information disclosure management systems and the scope of information disclosure obligors, and stipulate that listed companies and their directors, supervisors, senior management, shareholders, actual controllers, acquirers, as well as personnel of all parties involved in major asset restructuring and major transactions, as well as bankruptcy administrators, are the subject of information disclosure obligations; It also stipulates regulatory measures for information disclosure and legal liability for information disclosure violations.

In order to coordinate the implementation of the strategic deployment established by the Beijing Stock Exchange, the China Securities Regulatory Commission recently issued the "Beijing Stock Exchange Registration Measures for Public Offering of Stocks to Unspecified Qualified Investors (Trial Implementation)" (hereinafter referred to as the "Issuance Registration Measures") The Measures for the Administration of Securities Issuance and Registration of Listed Companies on the Beijing Stock Exchange (Trial Implementation) (hereinafter referred to as the "Refinancing Measures") and the Measures for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange (Trial Implementation) (hereinafter referred to as the "Continuous Supervision Measures") serve as the regulatory basis. Each of these three regulations has a special chapter that specifies the information disclosure obligations of new third board companies that are to be listed on the Beijing Stock Exchange. The main purpose is to further strengthen the information disclosure requirements of listed companies on the Beijing Stock Exchange, thereby enhancing the effective protection of the legitimate rights and interests of investors.

Finally, at the level of self-discipline and supervision of the exchange, the Beijing Stock Exchange has successively promulgated the "Listing Rules of the Beijing Stock Exchange (Trial Implementation)" (hereinafter referred to as the "Listing Rules of the Beijing Stock Exchange"), the "Trading Rules of the Beijing Stock Exchange (Trial Implementation)", the "Review Rules of the Beijing Stock Exchange for Public Offering and Listing of Stocks to Unspecified Qualified Investors (Trial Implementation)" Basic business rules such as the "Review Rules for the Issuance and Listing of Securities by Listed Companies on the Beijing Stock Exchange (for Trial Implementation)" and the "Review Rules for the Major Asset Restructuring of Listed Companies on the Beijing Stock Exchange (for Trial Implementation)", as well as the "Guidelines for the Handling of Business by Listed Companies on the Beijing Stock Exchange No. 7 - Handling of Information Disclosure Business", Corresponding provisions have been made on the information disclosure obligations of issuers listed on the Beijing Stock Exchange when conducting specific capital market activities.

2、 Specific requirements of Beijing Stock Exchange for information disclosure

As a supporting regulatory rule of the Beijing Stock Exchange, the "Issuance Registration Measures", "Refinancing Measures", and "Continuous Supervision Measures" all specify the information disclosure obligations of securities issuers of the Beijing Stock Exchange, which also means that the information disclosure obligations of securities issuers of the Beijing Stock Exchange will accompany their respective stages in the public offering, refinancing, and continuous supervision process. The Listing Rules of the Beijing Stock Exchange also specify the information disclosure content that must be performed by listed companies on the Beijing Stock Exchange in detail in its chapters 5, 6, 7, and 8. These regulations require information disclosure to follow the basic principles of truthfulness, accuracy, completeness, timeliness, and fairness. In addition to following the requirements of the Securities Law to disclose information that has a significant impact on securities trading prices, the following specific requirements are also listed:

（1） Documents and contents to be submitted for announcement

According to the "Issuance and Registration Measures", after the registration application documents are accepted by the Beijing Stock Exchange, the issuer shall disclose the prospectus, issuance recommendation, listing recommendation, audit report, and legal opinion in advance on the website of the Beijing Stock Exchange. When the registration application documents are submitted to the CSRC, the aforementioned documents shall be simultaneously disclosed on the website of the Beijing Stock Exchange and the website of the China Securities Regulatory Commission. The documents disclosed in advance shall not contain price information. Before issuing shares, the issuer shall publish the registered and effective prospectus on an information disclosure platform that complies with the provisions of the Securities Law, and at the same time place it at the company's domicile and the Beijing Stock Exchange for public reference. If the issuer publishes the aforementioned effective prospectus on other platforms, the publication time shall not be earlier than the time when the issuer conducts disclosure on the information disclosure platform in compliance with the provisions of the Securities Law.

The "Refinancing Measures" stipulate that listed companies should prepare a prospectus and issuance report according to regulations and disclose them according to law; Guided by investor demand and in combination with its own characteristics, it will disclose the basic information of the listed company, the situation of this offering, and the impact of this offering on the listed company in a targeted manner, fully disclosing the necessity and rationality of the funds raised this time. Listed companies should also timely disclose the announcement of the issuance progress. When submitting the registration application documents for listed companies, the Beijing Stock Exchange shall simultaneously publish the prospectus and other documents on the website of the Beijing Stock Exchange and the website of the China Securities Regulatory Commission. Before issuing securities, a listed company should publish its registered and effective prospectus on an information disclosure platform that complies with the provisions of the Securities Law, and at the same time place it at the company's domicile and on the Beijing Stock Exchange for public reference. If a listed company publishes the aforementioned effective prospectus on other platforms, the publication time shall not be earlier than the time when the listed company makes disclosure on the information disclosure platform in compliance with the provisions of the Securities Law.

The "Continuous Supervision Measures" stipulate that listed companies should establish and implement a management system for information disclosure matters, which is the responsibility of the chairman of the listed company, and the secretary of the board of directors to organize and coordinate relevant matters. A listed company should fully disclose industry operating information, as well as information that may have a significant adverse impact on the company's core competitiveness, business activities, and future development. If a listed company has not yet made a profit, it should fully disclose the reasons for not making a profit, as well as the impact on the company's cash flow, strategic investment, and production and operation sustainability. "If immediate disclosure of a significant matter that a listed company should disclose would harm the company's interests or mislead investors, the listed company may disclose it when the final resolution on the significant matter is reached, provided that the relevant insider has committed in writing to confidentiality. However, if the significant resolution has been disclosed or is difficult to maintain confidentiality, the listed company should immediately disclose it.". If necessary, listed companies and relevant information disclosure obligors may publish significant information during non trading hours, but they shall disclose relevant announcements before the beginning of the next trading period. The controlling shareholders and actual controllers of a listed company shall cooperate with the company in fulfilling its information disclosure obligations, and shall not require or assist the listed company in concealing the information that should be disclosed. Listed companies should disclose information on information disclosure platforms that comply with the Securities Law, and the time for publishing information on other media should not be earlier than the time for disclosing information on information disclosure platforms that comply with the Securities Law.

In addition, the "Continuous Supervision Measures" and the "Listing Rules of the Beijing Stock Exchange" stipulate that the information that should be disclosed belongs to state secrets, trade secrets, or commercially sensitive information, and the disclosure may lead to violations of laws and regulations or endanger national security, lead to unfair competition, harm the interests of the company and investors, or mislead investors, "If fulfilling relevant regulations on information disclosure may result in listed companies and relevant information disclosure obligors having difficulty reflecting the actual situation of their business activities, or meeting industry regulatory requirements, or other relevant regulations, listed companies and relevant information disclosure obligors may apply for a suspension or exemption from disclosing the information, but the reasons and alternative plans shall be fully explained.".

（2） Contents of voluntary disclosure

According to the provisions of the Securities Law, the Administrative Measures for Information Disclosure of Listed Companies, and the Listing Rules of the Beijing Stock Exchange, relevant information disclosure obligors can voluntarily disclose information related to investors' value judgments and investment decisions. The voluntarily disclosed information shall not conflict with the information disclosed according to law, shall not mislead investors, and shall not engage in market manipulation, insider trading, or other illegal or illegal activities. "Where a listed company and its relevant information disclosure obligors voluntarily disclose information, when events similar to the disclosure event occur, they shall disclose it in accordance with the same standard, and may not selectively disclose it.". If there is a significant change in the disclosed information that may affect investors' investment decisions, the progress announcement shall be timely disclosed until the matter is completely completed.

（3） Periodic and interim reports

The Securities Law, the Measures for the Administration of Information Disclosure by Listed Companies, and the Listing Rules of the Beijing Stock Exchange all stipulate that listed companies should prepare regular and interim reports according to law and submit announcements to the stock exchange and the China Securities Regulatory Commission. According to the Listing Rules of the Beijing Stock Exchange, regular reports submitted to the Beijing Stock Exchange include annual reports, interim reports, and quarterly reports. Listed companies on the Beijing Stock Exchange shall prepare and disclose annual reports within 4 months from the end of each accounting year; Prepare and disclose interim reports within 2 months from the end of the first half of each accounting year; Prepare and disclose quarterly reports within the first three months and one month after the end of the ninth month of each fiscal year, and the disclosure time of the first quarterly report shall not be earlier than the annual report of the previous year. "If a listed company discloses its performance before the disclosure of its regular reports, or there are performance rumors and abnormal fluctuations in the company's stock trading, it shall promptly disclose its performance flash report.". "If a listed company is not expected to disclose its annual report within 2 months from the end of the accounting year, it shall disclose its performance report within 2 months from the end of the accounting year.". If a listed company anticipates significant changes in the net profit of the previous accounting year before the disclosure of its annual report, it shall also provide a performance forecast. The procedures and specific contents of regular reporting by listed companies on the Beijing Stock Exchange are listed in the two guidance documents issued by the Beijing Stock Exchange, namely, "Business Guidelines for Listed Companies No. 6 - Matters Related to Regular Reporting" and "Guidelines for Continuous Supervision of Listed Companies No. 2 - Quarterly Reporting".

According to the Listing Rules of the Beijing Stock Exchange, when major events occur that may have a significant impact on the company's stock trading prices and investors' investment decisions, listed companies and relevant information disclosure obligors shall promptly disclose interim reports. According to this rule, significant events that trigger the disclosure of interim reporting situations include the occurrence of transactions that should be disclosed, or other significant events that should be disclosed. "Transaction" refers to the purchase or sale of assets, foreign investment, provision of guarantees, provision of financial assistance, lease in or out of assets, signing of management contracts, donation or acceptance of assets, debt or debt restructuring, transfer of research and development projects, signing of license agreements, waiver of rights, etc. by a listed company. The transactions that should be disclosed include significant transactions and related transactions. The evaluation criteria for significant transactions are determined by financial indicators such as the total amount of transaction assets, transaction amount, and profits generated from the transaction. A listed company shall promptly disclose any related transactions with related natural persons that have a transaction amount of more than 300000 yuan, or with related legal persons that account for more than 0.2% of the company's assets or market value in the latest period and exceed 3 million yuan. In addition, when a listed company experiences abnormal stock fluctuations, market rumors, pledge or judicial freeze of more than 5% of the company's shares held by shareholders of the listed company, the listed company and relevant information disclosure obligors shall promptly disclose them. A listed company should also disclose arrangements such as equity incentive and employee stock ownership plans formulated by the company.

3、 Risk of legal liability for non-compliance with information disclosure obligations

Information disclosure is a key issue in the transparent supervision of the capital market. If information disclosure obligors do not actively fulfill their information disclosure obligations, they will face significant administrative penalty risks and criminal liability risks. Article 197 of the Securities Law stipulates that if an information disclosure obligor fails to submit relevant reports or fulfill its information disclosure obligations in accordance with the provisions of this Law, it shall be ordered to make corrections, given a warning, and fined not less than 500000 yuan but not more than 5 million yuan. At the same time, the directly responsible person in charge and other directly responsible personnel shall be given a warning and fined not less than 200000 yuan but not more than 2 million yuan. "If the controlling shareholder or actual controller of the issuer organizes or instructs them to engage in the above illegal acts, or conceals relevant matters, resulting in the occurrence of the above circumstances, a fine of not less than 500000 yuan but not more than 5 million yuan shall be imposed;"; The directly responsible person in charge and other directly responsible persons shall be fined not less than 200000 yuan but not more than 2 million yuan.

At the same time, in response to the relevant provisions of the new Securities Law on information disclosure, tamping down the responsibility of information disclosure obligors, and comprehensively cracking down on illegal acts of information disclosure, the Criminal Law Amendment (11), which was officially implemented on March 1, 2021, significantly increased the criminal punishment for the crime of "violating the rules and not disclosing important information", with the maximum sentence increased from 3 years to 10 years, and the amount of fines changed from 20000 yuan to 200000 yuan to "concurrently fined.", Cancel the upper limit of 200000 yuan, and incorporate into criminal law regulations acts such as fraudulent information disclosure organized and instructed by companies and controlling shareholders and actual controllers of enterprises with information disclosure obligations, as well as the concealment of relevant matters by controlling shareholders and actual controllers, leading to the disclosure of false information by companies. In this context, how listed companies adapt to new regulatory requirements, effectively prevent and resolve the criminal liability risks caused by illegal information disclosure has become a new test for market participants brought by the "Criminal Law Amendment (11)".

Summary

Of the 20 typical illegal cases examined by the CSRC in 2020, nearly half involve information disclosure violations by listed companies! The first of the six typical cases of securities crimes released by the Supreme People's Procuratorate is also a case of illegal disclosure of important information! From this, we can see that as an important component of deepening the structural reform of the financial supply side in the outline of the national "14th Five Year Plan", comprehensively implementing the stock issuance registration system, strengthening the supervision of information disclosure, and cracking down on information disclosure violations such as financial fraud and false statements have become the top priority in the current work of legalizing the capital market. On the occasion of the establishment of the Beijing Stock Exchange, all new third board companies preparing to go public on the Beijing Stock Exchange need to pay attention to in-depth study and implement the provisions of the Securities Law, the China Securities Regulatory Commission, and the Beijing Stock Exchange on information disclosure, strictly perform information disclosure obligations, and comply with legal financing, so as to correctly play the role of the Beijing Stock Exchange in financing small and medium-sized enterprises, and achieve deepening the reform of the new third board, Create the strategic goal of serving the main position of innovative small and medium-sized enterprises with "specialization, specialization, and innovation".

(This article is translated by software translator for reference only.)