On System Of Forward Looking Information Disclosure By Chinese Listed Companies

As an important part of the information disclosure mechanism system in the securities business, the forward looking information disclosure mechanism has been discussed by academic since long ago till recently. Along with the flourishing of security market, the voice of protecting investor's profit is louder, and the demand for information disclosure mechanism system is not only limited in reflecting historical information disclosure mechanism system which has happened, but also the listed company information disclosure mechanism system for investor's determination, which has been considered by law and china securities regulatory commission. Given this situation, the purpose of this article is whereas to look firstly throughout the fundamental theory of forward looking information disclosure mechanism, research on the existing regulations about Chinese listed company, then examine critically upon this mechanism in our country. On the basis on the relatively advanced legislation in the America, I shall try to put forward some suggestions about how to improve the current relevant mechanism system in China.This article is divided into four Chapters.Chapter one, is mainly analyses about the fundamental theory on the forward looking information disclosure mechanism system. As there is no relevant mechanism system in China, we should make the connotation clear. Compared with historical information, forward looking information is a kind of description about the future of listed companies. Owing to the future orientation, forward looking information possess characteristic of limitation. Furthermore, the standard is different between forward looking information and historical information, take future information for example. The features of itself determine its value and significance. As the product of market flourishing, forward looking information disclosure mechanism system could help invertors make right decision, especially for protecting the profit of minority investors, which give them equal chance to majority investors. Moreover, specification possesses significant meaning to realize optimization in security market.In Chapter two, I sort out the relative regulations and files about forward looking information for listed companies. This is the right creation point. As for the quick developing of security regulation, this article introduces how forward looking information evolutes, from 1993 to 2006. The reason for choosing profit-making forward looking information mechanism system is that it is the typical one to show the special function and idea of forward looking information mechanism system. And this system reflects the turning point in securities regulatory idea.In Chapter three, I'll concentrate on the information disclosure mechanism system in the American securities market, which is the most advanced all over the world. Researching on this has profound significance. As is known to us, the most distinguished virtues of the disclosure mechanism in America are the investor-interest oriented protection systems, including the Safe Harbor Provision (1979) and The Bespeaks Caution Doctrine (legally accepted in 1995) as the main points. Beside this two, the voluntary disclosure method in America takes the dominant part in the Forward Looking information disclosure system, which is along with much detailed legislative protection. Though at the same time, there is an exception I need to point out :that is, once the information disclosed turned out to be false or misleading, the voluntary disclosure methods then would be obliged to transform to the continuous compulsive disclosure—that is ,the duty to renovate information.In Chapter four, this article points out the defect of forward looking information disclosure mechanism system and put forward some suggestions about how to improve the current relevant mechanism system in China. As a result of that investing in a listed company's stock means investing the company's future prospect and the profit-making capacity, forward looking information disclosure is the reliable basis for obtaining future prospect of this company's future. However, nowadays in our country, there still exist several problems on forward looking information disclosure mechanism system to solve. For example: Firstly, the system is short of systemic rule; especially the regulations on the creation of forward looking information and on the methods of disclosure are less than enough. Secondly, the responsibility system is seriously incomplete, which over-emphasized the administration responsibility, while relatively lack of emphasizing on the crime responsibility and the civil responsibility. And especially, responsibility system didn't attach importance to the civil responsibility—which should be the core of the securities laws, which consequently made the rights of the investors can not get protected. Thirdly; the corresponding systems of responsibility preventing is much lacking. And this made the listed companies which disclose forward looking information reasonably and in good faith can't receive the protection of law, which would also reduce the enthusiasm of the listed companies disclosing information voluntarily. Lastly, we should admit that, the whole system of voluntary forward looking information disclosure is far behind the advanced security law system in the world; hence it can't satisfy the demand of the current development of our county's securities market. When making laws, legislative body will face two aspects: first of all, forward looking information disclosure mechanism system should encourage all the issuers provide sufficient and effective information disclosure, which makes rational investors get right decision, however the investors depend on this kind of disclosure. Moreover, when apply sanctions to false orientation disclosure, legislative body should not damage the activeness of issuers and honest, preventing investors involved in law suit. So on basis of the fundamental principles above, my main suggestions are following: make the formal system of forward looking information disclosure more completed, improve the listed companies' governance structure; coordinate the content and approach of the voluntary forward looking information disclosure; encourage listed companies forward looking information disclosure, avoid alternative disclosure; improve market competition system; establish and improve the legal responsibility system, especially the civil responsibility.