The quality of information disclosure is a crucial reflection of a listed company's performance and serves as a key basis for investor decision-making. The Shanghai and Shenzhen Stock Exchanges place high importance on the quality of listed companies' disclosures, conducting annual comprehensive evaluations of their disclosure practices.
In March this year, the two exchanges issued guidelines—*Shanghai Stock Exchange Self-Regulatory Guidelines No. 9 on Information Disclosure Evaluation* and *Shenzhen Stock Exchange Self-Regulatory Guidelines No. 11 on Information Disclosure Evaluation (2025 Revision)*—collectively referred to as the *Evaluation Guidelines*. These guidelines emphasize stricter disclosure supervision, crackdowns on financial fraud, enhanced cash dividend oversight, and efforts to improve listed companies' investment value, setting higher standards for disclosure quality.
An analysis of the 2024–2025 disclosure evaluation results for A-share listed banks shows that all 42 banks maintained ratings of B or higher, with 22 receiving an A rating. Most banks retained their previous year’s ratings, with only six experiencing changes. Among them, Everbright Bank, Huaxia Bank, Zheshang Bank, Bank of Hangzhou, and Zhangjiagang Rural Commercial Bank saw their ratings upgraded, while only Bank of Shanghai was downgraded.
The *Evaluation Guidelines* assess listed companies based on eight criteria: 1. Standardization of disclosures 2. Effectiveness of disclosures 3. Investor relations management 4. Investor returns 5. Social responsibility disclosures 6. Penalties, sanctions, and regulatory actions 7. Support for exchange initiatives 8. Other exchange-determined factors
Wu Zewei, a banking researcher, noted that high-quality disclosures are fundamental to maintaining capital market confidence and a bank’s credibility. Transparent reporting on financial conditions, operational results, risk management, and corporate governance reduces information asymmetry, aiding investors in making informed decisions and supporting fair valuations.
Under increasingly stringent financial regulations, robust disclosure practices are not just legal obligations but also a means for banks to demonstrate prudent operations, transparent governance, and long-term growth potential—key factors in sustaining financial stability and investor trust.
**Impact on Refinancing and M&A Approvals** Disclosure ratings (A, B, C, D) influence regulatory reviews of refinancing and M&A applications. Higher-rated companies enjoy procedural benefits, such as reduced scrutiny and priority training opportunities. For instance: - **Shanghai Stock Exchange** grants A-rated firms exemptions from post-disclosure reviews (barring contentious cases), streamlined capital-raising approvals, and invitations to share best practices. - **Shenzhen Stock Exchange** offers fewer inquiry rounds for refinancing/M&A, tailored training, and preferential nominations for advisory roles.
Both exchanges clarified that ratings do not constitute investment advice or reflect company valuations.
**Banks Commit to Enhancing Disclosures** Several A-rated banks publicly affirmed their commitment to further improving disclosure quality. Examples include: - **Bank of Hangzhou**, upgraded to A, highlighted its third A-rating in four years and pledged to strengthen transparency and investor communication. - **China CITIC Bank**, maintaining its nine-year A streak, emphasized rigorous compliance, investor-focused reporting, and a RMB 170 billion cumulative dividend payout. It also outlined plans to align with global ESG standards. - **Bank of Changshu**, a seven-time A-rater, vowed to uphold high governance standards and proactive investor engagement.
These banks aim to leverage their ratings to foster sustainable growth and shareholder value.
Comments