Shenzhen Stock Exchange: Listed companies on the Main board urged to establish derivatives investment risk control system

Shenzhen Stock Exchange: Listed companies on the Main Board urged to establish derivatives investment risk control system


“Guidelines No.8 of the Shenzhen Stock Exchange on Information Disclosure of Listed Companies-Derivatives Investment” was released by the Shenzhen Stock Exchange on August 28, requiring that companies listed on the Main Board shall establish the effective risk control system for derivatives investment and take the reasonable risk management measures to conduct the effective monitoring and risk assessment in respect of derivatives value changes, timely expose the relevant information of derivatives investment to the public. These Guidelines are aimed at regulating the derivatives investment conducts of listed companies and their controlling subsidiaries, improving the transparency of derivatives investment information disclosure.

These Guidelines also require that listed companies shall make preparatory work before derivatives investment, including the establishment of effective derivatives investment risk control and information disclosure system, and listed companies shall draw up the corresponding accounting policies and determine the method for the measurement and calculation of derivatives investment business.

With respect to the follow-up management, these Guidelines require that the relevant departments of listed companies shall track the changes in the public market price or fair value of derivatives, timely make assessment on the risk changes of invested derivatives, at the same time, theses Guidelines also ask listed companies to set the proper stop loss limit and specify the procedure for stop loss disposal and strictly carry out the stop-loss provision.

According to these Guidelines, if the totaled loss or floating loss reached up to 10 percent of the net assets audited in the latest period, with the real amount exceeding RMB 10 million, listed companies shall timely make the disclosure by the way of the special announcement. Listed companies shall disclose the information relating to the derivatives investment underway in the regular report.