Research On Differentiated Information Disclosure Of STAR Market Under Registration-based IPO System

In 2019,the Shanghai Stock Exchange(SSE)established a STAR Market that will pilot an IPO registration system.The STAR Market refers to an organic component of the multi-level capital market,the IPO registration system refers to the stock issuance review system.In the STAR Market,the major regulation system is called “Differentiated Information Disclosure”.It is the combination of STAR Market and IPO registration system that turns out the differentiated information disclosure system.The multi-level capital market system in China asks for differentiation arrangement of the disclosure system,but the differentiated information disclosure system is not a brand-new thing.The Differentiated information disclosure is a nature outcome of the process of Chinese capital market development.The most important regulation in the IPO registration system is information disclosure regulation,it is the differentiated information disclosure system in the STAR Market.The IPO registration system in the STAR Market,which includes transferring the stock issuance review system,decentralizing the authority of issuance stocks and listing company review,demanding the intermediary agency responsibility,and improving the investor's rights protection by establishing a qualified investor system,has big effects on the Differentiated Information Disclosure system.In this article,the differentiated information disclosure system is defined as within a country or region,according to the differences in the market,industry and scale attributes of listed companies,different regulations are made on the standards for information disclosure,making the listed companies' information disclosure are specified on the content and form of its own,which promotes the effectiveness of information disclosure.The differentiated information disclosure system in STAR Market is established to balance the benefits between the investor and the listed company in order to offer a fair market for all companies who need money through IPO.This unique system is based on the basic trading system in the registration system,it makes the disclosure rules difference to fit the Tech-sci company's nature.The STAR Market established some more targeted and effective information disclosure rules,such as detailed the industry information disclosure rules.Also,it made some flexible differentiated disclosure rules,such as allowing delayed disclosure that may mislead investors or harm the company's interests and for those who are difficult to apply the rules,it can be postponed or exempted,and the reasons and alternatives can be explained.Information can be supplemented voluntarily on the basis of compulsory disclosure as well.Some unnecessary rules are eliminated by simple the disclosure requirements policy,for example,classifying similar information and short the financial report period.It is a big progress that the STAR Market unified the criteria for determining materiality,using the influence of investment decisions or the impact of stock prices as a binary selection criterion for judgment.In addition,it has differentiated the supervision method of information disclosure.It not only adopts the pre-event or post-event supervision method based on the complexity of the event,but also establishes a dynamic inquiry mechanism for the post-event and post-event supervision in order to promise a differentiated information disclosure of a listed company.However,the differentiated information disclosure rules are too "fragmented" and have not yet formed a perfect system.The differentiated information classification element is singularity and incompleteness.It only includes the industry attributes,without considering the scale of issuer and the scale of financing.The SSE's inquiry rules on issuance of information disclosure is too detailed,which increases the smaller issuer's information disclosure cost.Due to the lack of a transfer mechanism between different capital market sectors,the delisting and re-listing of some STAR Market companies from the OTC market may result in overlap or cross disclosure of information that has been previously disclosed.The STAR Market registration system lack supervision mechanism for the registration process.It is possible that the China Securities Regulatory Commission(CSRC)and the SSE will make different decisions on the registration,which indicate a high risk of subjective value judgment.In the current downward trend of the global economic situation,in order to stimulate the economic development of the country and encourage companies to raise funds publicly,developed countries such as Europe and the United States have begun to try to reduce the financing costs of SMEs,restore the vitality of the capital securities market,and drive a new trend of economic growth.The SEC recently issued rules on the modernization and simplification of information disclosure in 2019.It has proposed simplified disclosure standards for SMEs in many aspects of information disclosure and further consolidated JOBS Act.The United States has relatively complete institutional arrangements for differentiated information disclosure,including legal rules such as “layered disclosure”,“customized disclosure” or “exempt disclosure”.The SEC has continuously supplemented and improved the "layered disclosure" rules,has repeatedly lowered the information disclosure standards for small and medium-sized companies such as smaller reporting companies and new growth companies.In the current economic situation in China,the problem of financing difficulties for SMEs has not been effectively resolved.Under the policy deployment of deepening there form of the securities market,how to take on the important task of stimulating economic development and improving the structure of the capital market,we have to consider the significance of facilitating SME financing or reducing the financing cost of SMEs for the construction of differentiated institutional arrangements.Therefore,it is emergency to establish a better differentiated information disclosure system during the IPO registration background.Firstly,we have to modify the current differentiated information disclosure system in the STAR Market through combine the materiality rule and the detailed sub-rules.Using simple rules for Tech-sci companies to reduce the cost of disclosure regulation.Because the registration reform has deep influence on the disclosure system,we must complete the registration systems to clarify the market positioning,cultivate a mature investor base,and create an independent intermediary organ.The experience of differentiated information disclosure in STAR Market is good for generalizing in other capital markets.